HL Deb 27 April 1995 vol 563 cc1095-148

House again in Committee on Clause 13.

Earl Russell moved Amendment No. 131:

Page 11, line 43, leave out ("such meaning as may be prescribed") and insert ("the same meaning as in section 2 of the Employment and Training Act 1973.").

The noble Earl said: We are now hack again with training Humpty Dumpty. The Bill states that "training" has: such meaning as may be prescribed". The Government state in their memorandum to the Delegated Powers Scrutiny Committee that their intention is that "training" should have the meaning it has in Section 2 of the Employment and Training Act 1973. That meaning is perfectly acceptable to me. Why have the Government not put it in the Bill? I beg to move.

Lord Mackay of Ardbrecknish

I listened with interest to the brief speech of the noble Earl who mentioned Humpty Dumpty. I thought that he was going to talk about "The Yeomen of the Guard" which I had the pleasure of seeing on Monday. I hope that I can explain why the provision is arranged the way it is.

As my noble friend explained in the debate on Clause 3, it is our intention to bring forward regulations to define training and other assistance for 16 and 17 year-olds. Our intention is that the definition for "training" will be certain training provided for the youngsters pursuant to arrangements made under Section 2 of the Employment and Training Act 1973. The definition of "other assistance" will be certain other assistance provided for them pursuant to arrangements made under Section 2 of the Employment and Training Act. I know that the noble Earl is not keen on regulations, but I think that this time he is teasing me about what was and was not put into the Bill in this case.

Over the past 15 years the Government have brought about significant reforms and changes in training and other provision for young people. We continue to do so. Modern apprenticeships in particular will provide training for young people to at least National Vocational Qualification level 3. They are a serious reform of our training system and will make a significant contribution to improving the nation's competitiveness.

I believe that the noble Earl recognises the strength of the reforms and I hope he also recognises the seriousness of our intentions. It is important that we maintain forward momentum in order to keep our competitiveness in global markets. That means having flexibility to take account of future developments. Like many matters in social security legislation, the definitions are not entirely straightforward. That is illustrated by the fact that even the noble Earl's amendment is technically deficient. I am sure that he is aware that a wide range of training is provided under Section 2 of the Employment and Training Act. His amendment embraces it all, although only a small part of it—principally youth training and modem apprenticeships—forms the basis of the Government's youth training guarantee. I am sure that the noble Earl would not wish us, any more than we do, to be able to fulfil the guarantee by offering young people pre-retirement training for example.

I believe that we must specify certain training only in that regard and the training may change over time. I believe that regulations are the best way to achieve that level of detail.

No doubt the noble Earl will tell me that it is unimportant that his attempted draft is technically defective and that we or he could bring forward a correct version. I sympathise and to that extent I am sure that he could get round the problem that I have just raised. However, I do not believe that it is as simple as that, for the reasons I have demonstrated. There are differences that we must be able to reflect in the future; changes will be made and even different arrangements within the United Kingdom. We must ensure that the legislation provides for them. I believe that the matter is best left to secondary legislation to deal with and I hope that on that basis the noble Earl will withdraw his amendment.

Earl Russell

I thank the Minister for his reply. I admit that it was not my intention to provide for post-retirement or pre-retirement training. Then I thought for a moment about the state of the labour market and asked, why not? I thought for a moment longer and decided that you cannot retire until you have had work. The Minister appreciates that I have misgivings about the legislation because it enables future governments to change the meaning of "training" in any way they like. However, I have made the points before and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 agreed to.

Clause 14 [Reduced payments]:

[Amendments Nos. 132 to 134 not moved.]

Clause 14 agreed to.

Clause 15 agreed to.

Clause 16 [Circumstances in which a jobseeker's allowance is not payable]:

[Amendment No. 135 not moved.]

The Deputy Chairman of Committees (The Viscount of Oxfuird)

I must advise the Committee that if Amendment No. 136 is agreed to I cannot call Amendments Nos. 137 to 142, due to pre-emption.

[Amendments Nos. 136 to 138 not moved.]

Baroness Hollis of Heigham moved Amendment No. 139:

Page 13, line 44, leave out ("week") and insert ("day").

The noble Baroness said: I should like to move Amendment No. 139 and speak to Amendments Nos. 140, 141, 145, 146 and 147. This set of amendments concerns the period of disqualification. That is after a determination has been made by the adjudication officer. Amendments Nos. 139 and 140 deal with our anxiety that the minimum should not be one week but one day and the maximum not 26 weeks but four weeks. Amendment No. 140 is triggered by the problems of giving up or refusing a training course or failing to follow a jobseeker's direction.

Under the Bill, disqualification for up to 26 weeks may follow where a person has failed to observe a jobseeker's agreement and subsequent directions, where he fails to attend a training course or has lost or refused work without good cause. We on our side believe that the sanctions turn a jobseeker's agreement into a coercive policy. Presumably, a person who has failed to abide by the jobseeker's agreement or failed to follow a direction can have the benefit restored if he goes on to comply with the agreement and can remedy the situation. However, if the benefit deduction occurred for something that happened in the past, it cannot subsequently be rectified. Nothing that the claimant can do will permit the benefit to be restored. The problem particularly arises on the issue of training schemes.

In the past only a few such schemes carried sanctions with them. Now, all do. Even though the course itself may last for as abbreviated a period as, say, four weeks, the claimant can nonetheless have benefit sanction imposed for up to six months for failing to attend. Despite the Minister's honeyed words earlier about the courses being "suitable", "relevant", "appropriate" and "quality", as we all know, some of those courses are of poor quality and are deemed irrelevant.

We argue that a penalty of up to 26 weeks' sanction of benefit is grossly disproportionate to the alleged offence. It is a fine of six months' income. Forgive us if we believe, or fear, that this is a back-door method of protecting the TECs, which cannot win their clients in the market-place—as the noble Baroness, Lady Williams of Crosby, put it so persuasively earlier in the debate—and therefore have to do it essentially by workfare-type sanctions.

Turning to Amendment No. 146, a similar problem arises when people voluntarily leave employment. From 1911 to 1986 (75 years) society decided that it could adequately protect the National Insurance Fund by six weeks' disqualification. In 1986, the maximum disqualification period was extended to 13 weeks, and in 1988 to 26 weeks. In other words, the Government are saying that since coming to power they have had to quadruple the period of time during which someone suffers disqualification from benefit because so many voluntarily leave work—at a time of such acute unemployment. To coin a cliché, it beggars belief.

There may be good reason for people leaving employment. We all know of situations where there has been a severe reduction in pay or a worsening of hours and conditions, which nonetheless have not been accepted by the Employment Service as good cause. I am a little familiar with the arrangements that have affected local government since the introduction of compulsory competitive tendering. For example, cleaners' pay was cut from £3.75 an hour to £2.45 an hour; hours of work were put up from 37 to 40; there was no holiday pay and no sickness pay. Yet someone leaving that job was deemed to have left it without good cause.

As we explored in previous amendments, not only is benefit suspension extensive; not only is it applicable to new alleged offences; and not only is it disproportionate to the offence, but also the right to hardship payments has been restricted. Together, this cluster of amendments would limit the penalty to what is still a deeply unpleasant, though perhaps not so life-threatening a sanction as those that are currently in the Bill. If the alleged offence is repeated without good cause, there is nothing to stop a reimposition of the benefit penalty. But there is at least a chance for a turn in direction if that benefit penalty was imposed with good cause.

Behind the amendment is a wider concern about the effect of poverty on the families involved. The strain on families trying to live on reduced benefit is unbelievable. We know that families go without food; children go to school in the winter in canvas plimsolls with holes in them; we see disconnection of electricity; we see families trying to eat cold food through the winter; we see debts from which they never recover. Children play truant; they leave school; they leave home; marriages break down; the wife returns to her parents and the husband goes into a clinical depression.

I sometimes wonder, when the Government seem so free and easy with their proposals to impose no income for six months and then provide hardship payments for vulnerable families of only 60 per cent. of benefit, whether they have even the faintest idea of what it is like to live for six months either without benefit or on only 60 per cent. of benefit. I wonder how those same Ministers would feel if they could not give their children three meals a day because of a penalty imposed on them by us? I beg to move.

8.15 p.m.

Lord Inglewood

Perhaps I may begin with some remarks about Amendments Nos. 139 and 145.

The overwhelming majority of people who become unemployed make every effort to find work at the earliest possible opportunity. Experience shows, however, that a small minority seek to abuse the benefits system. Benefit sanctions exist to protect the taxpayer and the National Insurance Fund contributor from subsidising people who have no good reason to be or to remain unemployed. They do that by influencing the behaviour of people who claim benefit or are thinking of claiming benefit. They also have an important role in reinforcing incentives for unemployed people to take the right steps to get back into work.

Both these amendments would reduce the minimum length of sanction from one week to one day, as was explained. Amendment No. 139 applies to the minimum length of a fixed-length sanction which can be prescribed for actions such as failing to carry out a jobseeker's direction or refusing to attend a prescribed course or programme.

Amendment No. 145 applies to the minimum length of sanctions that are determined by an adjudication officer for action such as leaving employment voluntarily without just cause; losing employment through misconduct; and refusing an offer of employment without good cause.

I appreciate that the shortest length of sanction that an adjudication officer can currently impose is one day. We believe that that is so short as to be meaningless. When an adjudication officer decides that a claimant has broken one of the benefit rules in this clause and has failed to show just cause or good cause for his actions, the result should be a sanction that will effectively deter claimants from acting in the same way, even when the minimum sanction is appropriate. JSA will be payable in respect of one week. It follows that the minimum length of sanction should also be one week.

I now turn to Amendment No. 140. This amendment would stipulate in primary legislation that the maximum period of fixed-length sanction should be four weeks. can certainly assure the Committee that this is the Government's intention for the regulations that will establish the period of sanction for those circumstances relating to employment and training provisions. We believe it right to set a clear penalty, so that unemployed people will be in no doubt as to the consequences if they reject our help and assistance without good cause. I must emphasise the words "without good cause". They are the key to the triggering off of the penalty. But we must retain the flexibility to revise this period should it prove insufficient in providing the proper incentives for taking up government assistance. For those reasons, I urge the Committee to reject this amendment.

Amendment No. 146 sets a maximum period of 13 weeks for sanctions for leaving voluntarily, for misconduct or refusal of employment and is unacceptable. Our experience in the 1980s showed that maximum periods of disqualification of both six and 13 weeks were simply not effective in discouraging people from making themselves unemployed. Returning to 13 weeks as a maximum would send all the wrong signals to unemployed people. We would, I am sure, see again more people leaving jobs of their own accord or refusing them for no good reason if they were offered.

It is important to recognise that a sanction of 26 weeks is not the norm. Where adjudication officers find that there are mitigating circumstances, they do not impose the maximum sanction—and quite rightly. Only 25 per cent. of cases of leaving voluntarily attract a maximum sanction. Only 40 per cent. of misconduct cases do. That gives a clear indication that adjudication officers weigh up the complex range of circumstances behind any decision to leave a job.

Baroness Hollis of Heigham

Will the Minister tell us what is the average disqualification period?

Lord Inglewood

I am afraid that I do not have that information immediately to hand, but I will give the figure shortly if it is available.

In this context, if one looks back at subsection (6) of the clause, it is clear that this is not triggered by any occasion of leaving, and so on. It must, in the case of subsection (b), be someone who left employment without just cause. Otherwise, the good cause test is triggered again.

The noble Baroness made reference to workfare. It is terribly important that we put our position on this matter on the record. My right honourable friend the Secretary of State for Employment said in another place that workfare will not be imposed if that word is used in the sense that it implies the state acting as employer of last resort with benefit paid as a surrogate wage. The Minister of State for Employment made quite clear to the Employment Select Committee in November that there are no plans to introduce universal compulsory work schemes of this type. We want to have people doing things that will enable them then to enter real jobs. I was asked by the noble Baroness about the average figure to which I referred earlier. I am afraid that I do not have the average figure here, but I will willingly write to her and provide it.

Finally, a suggestion was made that in some way or other these provisions were intended to assist the TECs which would otherwise be unable to fill up their places on employment schemes. I should like to put on record unequivocally that that is not so. I hope that those comments will reassure the Committee and that your Lordships will feel able to oppose these amendments.

Baroness Hollis of Heigham

The Minister said that it was in the Government's mind that there should be a maximum of four weeks' sanction for those who left employment or refused or left a training course without good cause. That is nowhere to be found on the face of the Bill. How do the Government expect their mind to be transposed into practice? Is it to be done by regulation and, if so, is it to be by negative or affirmative procedure?

Lord Inglewood

The proposal is to carry forward the existing arrangements where they apply. It will be done by regulation, as is made clear in Clause 16(2). The noble Baroness will know that the provisions that deal in particular with transitional regulations are to be found in Clause 33 of the Bill. Because they are transitional arrangements they will be dealt with by the affirmative procedure.

Baroness Hollis of Heigham

Obviously, I am being very stupid. Clause 16(2) does not mention four weeks. It provides: If the circumstances are any of those mentioned in subsection (5) the period for which the allowance is not to be payable shall be such period (of at least one week but not more than 26 weeks) as may be prescribed. The Minister said that it is in the Government's mind to confine it to four weeks on certain conditions and that it will follow existing practice. How will that be ensured?

Lord Inglewood

I apologise to the noble Baroness for not making myself clear. That will be specified in regulation.

Baroness Seear

The noble Lord said that he would provide the average figure. Would it not be better if he provided the median figure which would give a more accurate impression?

Lord Inglewood

Since the noble Baroness is being so statistically literate, I shall certainly do that.

Baroness Hollis of Heigham

I wonder whether the Minister does have this information. The matter was pressed in the Commons and the Minister could not answer. I do not believe that it has been forthcoming. The noble Baroness is absolutely right in saying that what is important is what happens on the ground in practice, as opposed to minimum and maximum penalties.

I shall study the answer of the Minister and, if appropriate, perhaps return to it at Report stage. With the leave of the Committee, I should like to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 140 to 149 not moved.]

Lord McCarthy moved Amendment No. 150:

Page 14, line 10, leave out paragraph (a).

The noble Lord said: In moving Amendment No. 150 1 shall speak also to Amendment No. 158. The object of the two amendments is simple: to abolish the jobseeker's direction. The jobseeker's direction is oddly named. One might have thought that the direction would be given by the jobseeker. However the jobseeker receives the direction. It would be better called the jobseeker's additional burden. It is something more that the jobseeker has to do. If there is anyone who does not know by now what a jobseeker is, he is someone who used to be unemployed. We do not now have any unemployed people; they are all jobseekers who are trying to make themselves active and available. This idea may spread. We may have old age pensioners who are dependant-seekers, looking for people on whom they can be dependent. We may have sick people who are health-seekers, trying to stop eating unhealthy food. If they eat enough healthy food they may qualify for some benefit. We may have widows who perhaps can be spouse-seekers, trying to find ways to get off the parish. However, so far it is only the unemployed who have been turned into seekers after activity. If they are available and active enough they get some benefit, except under Clause 16. The purpose of Clause 16 is that, however active the seeker and whether or not he qualifies under every other regulation, he can still be caught. The main way that the Bill catches him is that he is given a jobseekers' direction.

We have the same objections to the jobseekers' direction as we have to most of the rest of the Bill. In effect, it is all in regulation; in other words, we do not know what the jobseeker will be directed to do. We are not told what will be in the direction, only that if he refuses it or fails to carry out any reasonable direction having regard to the circumstances on the face of the Bill, he will suffer loss of benefit.

We all know the general nature of the jobseeker's direction. On the face of the Bill, the purpose is to assist and improve the chances of employment. But we also know that the department has had something similar to the jobseeker's direction before there were jobseekers. In the days when we still had unemployment there was something called jobsearch assistance. We know that from the evidence submitted by the CABs about individual claimants who were put on endless restart programmes. In particular, one claimant in London was told, "The trouble with you is that you will not change direction". That is very apt, because in future if he does not change direction he will get a jobseeker's direction, will he not? He will have to change direction. A Berkshire claimant, an Afro-Caribbean, was repeatedly sent to low-paid manual jobs when he thought that he had excellent 0 and A-level qualifications and might be sent to other jobs. In future he will be given a direction. Of course, if one is given a direction and one does not carry it out there will be loss of benefit. The presumption is that one will have to enter some kind of appeal process to try to persuade the adjudication officer that the direction given is not adequate or appropriate.

We say that this is not necessary. It is now half past eight. We have debated for a long time the many ways in which the Bill is more than sufficiently coercive in placing further impositions upon a person who was once unemployed but is now a jobseeker. There is no need whatever for jobseeker's directions, and that is why I move this amendment.

Earl Russell

I listened with great amusement to the noble Lord, Lord McCarthy. When he talks about spouse-seekers, I have one little piece of advice for him: Beware of widders, Sammy ! It is a matter of shame to me that my name is not added to this amendment. It is the result purely of an oversight. Almost certainly the oversight is mine. In spite of the absence of my name, this is probably the most important issue left in the remainder of the Bill. The jobseeker's direction is, I think, the most arbitrary power that I have ever seen conferred in English law, if indeed it is conferred. It has not yet happened. It gives to one person almost total control over the life of another. It gives them the power to direct those people to do all sorts of different things (most of which we probably have not yet imagined) on pain of total loss of benefit. It is a penalty which in my book is rather worse than imprisonment. What would we have said if the Bill had introduced a power to imprison the jobseeker if he did not obey the direction? I can reassure the Committee that I should have resisted a power to imprison the jobseeker, but I think that I would not have been quite so shocked as I am by a power to disentitle. The power to disentitle leaves the person to rot away slowly. That is the crueller of the two.

I know that the Minister will invoke "reasonable" and the adjudication officer. I shall not dwell on the point that we do not yet know the criteria of "reasonable". They will only come in the regulations. I shall dwell on the fact that the adjudication officer, on present figures, is 22.4 weeks away. That is 22.4 weeks before one gets the next little amount of money. It is a bit steep. It raises the question of what will be regarded as good cause for not taking up a job offer.

I want to ask a question of the Minister. It needs an answer at some stage before the Bill is put through. Will it be good cause to refuse a job that the travelling is too long and too difficult? There are many jobs—such as the one that I mentioned recently near Cardiff, where a man ceased to go to his job because his workmate had left his job and could not give him a lift there—which are too far for people reasonably to be expected to go.

Secondly, will it be a good reason for refusing a job that the work-related expenses form too high a proportion of the wages to make it worth a person's while? In my local Jobcentre, advertisements for plumbers or electricians almost always say "own tools essential". That condition can create genuine problems. Moreover, it can often happen, even in London, that the costs of travel are so great as to be prohibitive. Is that to be a reasonable ground for refusing a job? Those questions need answers.

In general, we on these Benches tend to believe that people are usually, but not invariably, the best judges of their own interests. People are usually the best judges of their own family interests. There may be reasons inside the internal dynamics of a family why one type of job, circumstances or hours in particular are simply not viable. For example, it may break down the whole of the care arrangements. We do not know whether the employment officer will be interested in that point. He may very well not be interested.

This is the kind of arbitrary power which, in my opinion, nobody ever ought to have over another. In fact it comes remarkably close to forced labour. That is something which I did not think we would ever see in English law. I am very sorry to see it put before this Chamber.

Lord Swinfen

Between now and the next stage of the Bill, I hope that my noble friends on the Front Bench will ponder very seriously the wording "without good cause" in this subsection and compare it with the Government's arguments made on Amendments Nos. 128 and 129. They have drafted this clause. I do not see why an amendment similar to the previous amendment should not be brought forward by the Government themselves at the next stage.

8.30 p.m.

Baroness Williams of Crosby

I want to raise one other issue on this amendment. I wholly share the consternation advanced so eloquently by my noble friend Lord Russell. I too find it extraordinary that directions of this kind should be able to be given by one human being to another, not least by someone employed in the public service to a citizen, and a rather disadvantaged citizen.

The issue is a separate one. I should be most grateful if Ministers would respond to it. One cannot help wondering whether one purpose of the Bill is to lead to a dramatic reduction in the figures for statistical unemployment. Obviously, if people are disallowed benefit in large numbers, the effect will be to remove them from the register of people who are seeking work. I suppose that following the suggestion of the noble Lord, Lord McCarthy, we should now call everyone a frustrated jobseeker instead of an unemployed person. But, whatever the word used, I take it that the statistics will reflect something. I wonder what they will reflect. I suspect it will be something more and more removed from the actual realities of unemployment. As the Minister knows, the statistics have already been changed many times.

My question therefore is this. Since it is important for the nation to have some idea of the real level of unemployment, in view of the legislation that is now being passed, which will make it increasingly difficult for someone without work to count as unemployed (they will count as something else), will the Government consider shifting the basis of raising statistics on those without work to assist them with labour censuses, such as those in the United States, which allow people to answer questions such as, "Are you seeking work?", "Are you able to find work and how long have you been seeking it?" and so forth? I fear the basis towards which we are now moving and what it will increasingly mean for whatever statistics are offered. I should also like to ask whether there is to be a monthly figure for those still seeking jobs who have not been placed but who are not on benefit as well as those who are. I should like to press the Minister on that because the statistical question is an important one from the point of view of drawing up economic policy. I am not at all clear what proposals are now being made for advancing employment statistics in any reasonable and transparent way.

Lord Inglewood

My noble friend Lord Swinfen, the noble Lord, Lord McCarthy, the noble Earl, Lord Russell, and the noble Baroness, Lady Williams of Crosby, raised a number of important points. I shall do my best to give them answers which I hope they will find satisfactory.

These amendments would seriously undermine the necessary powers to ensure that unemployed people take the right steps. Unless their actions actually called into question their availability for employment or whether they were actively seeking work, unemployed people could ignore, with impunity, any reasonable direction given to them by Employment Service staff. That is not acceptable. Unemployed people must make every effort to get back to work and for those who do not, it is right that we should require them to take action to do so. That is what these provisions are about—enabling activity to be required of unemployed people where appropriate in order to increase their chances of getting a job.

As mentioned by the noble Lord, Lord McCarthy, for many years there has been a provision whereby Employment Service staff can instruct unemployed people to take certain steps to get a job. The official recommendation to take such steps carried with it the threat of a benefit sanction if the claimant failed to take action. However, the provision is difficult to use because recommendation must relate to a specific type of employment in the locality. We are following in JSA that same approach but extending it. We plan to make sure that Employment Service staff can use this provision more widely across the range of actions that unemployed people may need to consider to increase their prospects of getting a job.

Jobseeker's directions will be specific to individuals. It may help the Committee if I read out from the Bill Clause 16(10) (b), which talks about the jobseeker's direction. It defines its terms of reference. The noble Earl was particularly concerned about the extent to which it might be possible. It reads: Jobseeker's direction' means the direction in writing given by an employment officer with a view to achieving one or both of the following"— I should like to emphasise this point— assisting the claimant to find employment [and] improving the claimant's prospects of being employed". That seems a very important element of the jobseeker's direction. It defines its purpose.

The directions will underscore the approach of actively seeking work. For example, the Employment Service officer might specify that the jobseeker should follow up specific job advertisements, that he might register with an employment agency, that he joins a job club or that he attends a suitable course. The Employment Service will, I am sure, never need to issue a direction to the vast majority of genuine jobseekers who will be happy to take such steps on the advice of the Employment Service. But for those who wish to avoid such help the consequences will be clear: loss of benefit for two weeks—as prescribed in the regulations—rising to four weeks if the jobseeker refuses consequently to carry out a subsequent direction.

Of course there must and will be proper safeguards for individuals who fail to carry out a direction. It is important to be clear. The trigger for potential sanctions is only when a failure takes place without due cause. It was the noble Earl who raised the question of the definition of what "good cause" might be. Currently, there is a considerable body of case law defining good cause. It is the Government's intention that this should be to some extent defined in regulations to provide a non-exhaustive list of the types of matters that adjudication officers should take into account in making this determination.

A decision to impose a sanction will only be taken by an independent adjudication officer, not the Employment Service officer who has issued the direction in the first place.

Earl Russell

I should be grateful for clarification. The two courses I mentioned have hitherto been good. Will they continue to be so?

Lord Inglewood

It is my understanding that they will be.

Lord McCarthy

If I understand the Minister correctly, he seems to be saying that the employment officer will decide in the first instance that the direction has not been complied with. That will then go to the adjudication officer. It is the adjudication officer who will decide that that is the case. Where does the individual go to appeal against the decision of the adjudication officer who is the first person, the Minister says, to take the substantive decision? There seems to be no appeal at all.

Lord Inglewood

The Employment Service officer has to operate within the terms of the law in deciding, first, whether to impose a direction. Secondly, after a direction has been imposed, he has to be the first gate to see whether in his judgment the breach that may have occurred was one which occurred without good cause. Then, as the noble Lord says, the matter is passed to the adjudication officer. It is worth emphasising in this context that there is no question of any kind of disqualification from benefit until after the adjudication officer has looked at the matter.

Lord Swinfen

Will the passing of the matter to the adjudication officer mean that the jobseeker will have an opportunity to see the adjudication officer face to face, or will it be a purely paper exercise from which he is excluded?

Baroness Williams of Crosby

Before the Minister replies to that question, perhaps I may seek his guidance on another part of subsection (10), which is the issue of, such other person as may be designated for the purposes of this section". If in giving a direction the employment officer has the kind of power we have been discussing, the extension of this power to some other person as may be designated, who presumably might be someone on a short-term contract, raises yet further disturbing issues.

Lord McCarthy

With respect, I was attempting to get the Minister to answer a question of mine. He has not yet answered it. If it is now being said to be the case that in this instance the benefit is not stopped until one gets to the adjudication officer, that is strange indeed, because in other cases the Government did stop the benefit. They stopped the benefit from the point when the employment officer took the decision. If it is the case that there is no real decision—and that is the answer—until one gets to the adjudication officer, then there is no appeal from the adjudication officer. The only way the adjudication officer could act as an appeal is if the decision were taken prior to him being involved. How do the Government reconcile all this?

Lord Inglewood

I should like to go back over what I said before. When the Employment Service officer makes a jobseeker's direction he has to do so within the terms of the law. If that is broken he has to determine in his mind, according to the criteria to which I have already alluded, whether or not that breach has been made without good cause. It is only if he believes that the breach has been made without good cause that the matter is sent to the adjudication officer. The crucial point here is that it is on the basis of the decision of the adjudication officer whether or not a disqualification occurs. To that extent he is the first person in the chain, but he is not the first person for the purposes of appeal which is against the decision of the adjudication officer and which lies to the Social Security Appeal Tribunal. That appeal is the first time that, as it were, there has been a second opinion on the matter of whether the disqualification is appropriate but it is not the first decision that is made about the central criterion behind his decision—that is to say, whether the breach has occurred. So the failure to follow the direction has occurred without good cause.

Lord McCarthy

How do the Government justify the fact—I am not suggesting that they should go back on this—that benefit is not cancelled in this isolated instance until we get to the adjudication officer, whereas in every other case it is?

Lord Inglewood

The answer to that question is straightforward. In these instances there is a valid jobseeker's agreement in place and therefore an entitlement to benefit. The entitlement exists. Because the entitlement exists, the presumption is, until proved otherwise, that benefit is payable. That is the way the system works in this regard. That compares with arguments about availability for work and actively seeking work where we have not reached a position where an entitlement has been established.

Baroness Hollis of Heigham

We pursued this point from the other end on a previous Committee day. We tried to get the fining and disqualification from benefit on the actively seeking work clause, which takes place before the judgment is made, aligned with what the Minister in another place very belatedly conceded should apply to those situations where people voluntarily leave work, possibly without good cause, or whatever—misconduct and voluntarily leaving work. It was conceded, I understand, because the length of time it took—given the sensitivity and the difficulty of some of the relevant evidence—was up to 20 weeks. Even the Government in their embarrassment did not believe that someone could realistically live for 20 weeks without benefit while they decided whether the charge or the doubt was well founded. Given that the Government have accepted the point in that regard, what we would be expected to be told by the Government is why a similar system—whereby one is not punished until the offence is proved—should not apply to those who may or may not be actively seeking work.

Lord Inglewood

I come back to the point with which I started. The distinction between what we are discussing now and what we discussed on previous occasions is that we are talking about sanctions in respect of an action that has taken place, or is alleged to have taken place, after entitlement to benefit has been established. That is why in these instances, if there is an allegation of breach, the matter is carried forward in the way I have described.

Baroness Hollis of Heigham

That cannot be right. I take the point that where someone voluntarily leaves work or where there is misconduct there is a notion of an offence that has been committed in the past and, as the noble Lord says, an entitlement to benefit has been established. But the same is true for someone on JSA in respect of whom, say, two months or three months on, it may occur to the employment officer, particularly if he has not yet met his target for referrals of doubt, that he is not actively seeking work as energetically as he should and therefore, though an entitlement has been established in the past in exactly the same way as my noble friend outlined, it is suspended and cannot be reinstated until after the tribunal or discussion has taken place. What we are trying to establish is that the parallels between leaving work on the ground of misconduct or voluntarily leaving work are identical to the problems associated with actively seeking work. In both cases an entitlement has been established. In one, apparently, the offence has occurred and one would have thought that benefit would have been withheld, but instead it continues. In the other case, which is merely a doubt, and one does not know whether an offence has or has not been committed, the individual is being fined in advance of that doubt being established as valid. We still believe that that is monstrously perverse.

Lord McCarthy

In the terms of the Minister's defence, both individuals mentioned by my noble friend have a jobseeker's agreement. Therefore, contractually they were in exactly the same position.

Lord Inglewood

To say that they have a jobseeker's agreement cannot be true because we do not yet have a jobseeker's agreement. As we discussed on Tuesday, the point about the jobseeker's agreement, as the noble Lord, Lord McCarthy, commented, is that there is not a contract. Therefore we are not talking here about any kind of contractual relationship. I come back to the point that I have made on two previous occasions, There is a distinction between cases where there is an entitlement already in place and those where there is a doubt as to whether an entitlement exists at all.

Earl Russell

May I now safely deem the Minister to have sat down?

Lord Inglewood

Not quite. I wish to reply to the noble Earl. He raised a very good point and one which it is proper that we should answer. It was the question of whether, in determining good cause, we take into account such matters as travelling time. The answer to that is yes. It will be taken into account if it is appropriate in the circumstances to do so. The other point the noble Earl raised was about having to provide tools. That is one of the reasons behind the back-to-work bonus. It will provide a lump sum of money which will enable the person the noble Earl describes to do the things which he quite rightly says need to be done to get the job.

Earl Russell

I am very grateful to the Minister for that answer. Before we are through with this matter I hope that he can tell us a little about the jobfinder's grant, which sounds like a good idea. There was one sentence early in the Minister's first reply which nearly took my breath away. I believe that I have got his words right. He said that this was one of the necessary powers to ensure that unemployed people take the right steps. What arrogance! How do they know what are the right steps? Is it not really the voice of the nanny state and that the state knows best; and that the state's judgment of what is the right step for people to take is necessarily better than that of the person taking the judgment?

Before that can be true we need to hope for rather higher standards of adjudication. According to the report of the chief adjudicating officer, 41 per cent. of sample decisions last year were found to be defective. The chief reason given for poor standards of decision-making was insufficient evidence. Voluntary leaving cases were most likely to be made without sufficient evidence. Do the Government believe that they know what are the right steps when that is the standard of the evidence from which their knowledge comes? Do they really believe that they know exactly what jobs people can and cannot do better than they can ever know themselves?

There are certain jobs which, if I were directed to take them, my wife would burst out laughing so loud that I would not dare go near them. She would be quite right and the employment officer who directed me to take them would be quite wrong. Nor is it fair on employers to force people into jobs in which they are almost certain to make really bad mistakes. They could even be jobs on which the safety of other people depends. We shall be soon having alcoholics forced to take jobs as bus drivers and then we shall be told that that is one of the right steps.

Before we are through with this matter, I shall be grateful to the Minister for a reply to the question asked by my noble friend Lady Williams of Crosby about the unemployment statistics. Are we going to continue having a claimant count? If so, is there going to be a clearly separate count, presumably based on the labour force survey, which will be quoted as the figures of the unemployed or are we going to be asked to believe that the statistics of those drawing the jobseeker's allowance are actually the statistics of the unemployed? I can assure the Committee that they are not going to be.

One last word about unsuitability for jobs. A man from Balliol with a first in Greats went into the Army and was discharged after one week for mental insufficiency. We shall get more cases like that.

Lord Inglewood

The noble Earl again raises a number of important points. He began by saying that this is an unwarranted piece of activity by the nanny state in order to arrogate to itself the right to direct people in this regard. I understand the point he is making, but does he really believe that it is going to be right in reality? The whole concept at the core of the jobseeker's agreement is to try to ensure that the jobseeker and the Employment Service—which has a degree of expertise which, however jaundiced the view one might have about the state, the jobseekers themselves do not have—plan together to try to ensure that they can agree a series of steps which will be of help to the jobseeker.

The noble Earl gave some examples which rather spoilt his case because in many ways they were so extreme as to undercut a good point which he was trying to make. In the real world, given that there is expertise in the Employment Service, it seems to us that this is a sensible way of trying to help the person concerned to try to get a job by enabling him to tap in to an expertise which undeniably is there. The noble Earl said that the exercise of this power—I have attempted to explain how it is to be exercised in a legal context—will lead to the dramatically disadvantageous conclusions that he described. I come back to the point I was making a few moments ago. The whole matter is triggered off where there is no good cause on the part of the jobseeker. Quite apart from the fact that the Employment Service, as a matter of practice, endeavours to behave sensibly with people when trying to help them with their jobseeking activities, if it does something which is ridiculous it will give the jobseeker good cause to do something different. In that event it seems to us that much of the concern that the noble Earl expressed is reduced.

A number of other points have been raised. The noble Earl made a number of comments about the poor performance, as I believe he described it in shorthand, in sending papers to adjudication. It is precisely because the Employment Service wishes to improve on its performance in sending documents to adjudication that its annual performance agreement has been achieved. We have already discussed it. It is not a target for disqualification, but for the Employment Service to try to do better as regards the matters to which the noble Earl referred than it has done hitherto.

There are two other matters. The first was the jobfinder's grant. That aims to encourage people who have been out of work for more than two years to take a job by paying them a grant to help cover any additional expenses that they incur on account of taking a job. I hope that that helps to define the matter for the noble Earl.

The noble Baroness, Lady Williams of Crosby, asked about the Government changing the basis for calculating the unemployment figures. The Government publish figures based both on the labour force survey, which contains the criteria to which the noble Baroness referred, and on those claiming benefit. We publish both and we shall continue to do so. I hope that that will enable the noble Earl and others to see exactly how things are progressing.

Earl Russell

The Minister asked me a question and I owe him an answer. He asked me whether I believe that is the way it will be in the real world. Yes, sometimes, I do. If it were one case in 10,000 I believe that that would be too many. When the Minister says "good cause", he means a cause which appears to the adjudication officer to be good. As long as the evidence available to the adjudication officer is defective, his decision cannot be any better than the evidence available to him.

We are all trying to look into a crystal ball when we ask how many times it will be like that. On the basis that I am looking into a crystal ball and that that is a highly dangerous activity, my estimate would be that it will happen in the region of 10 cases out of every 100—and that is a great deal too many.

9 p.m.

Lord Inglewood

The noble Earl has looked into his crystal ball, but I want to put on record that the kind of prognostication which the noble Earl has produced would not he acceptable to the Employment Service. Our aspirations are to do much better than that.

Earl Russell

Can the Minister tell me when my last prognostication about a government measure coming from the Department of Social Security was wrong?

Lord McCarthy

Unless the Minister wishes to reply to that, perhaps I may reply to the amendment. I do not want to curtail the debate because I am afraid that I have no alternative but to seek to withdraw the amendment. I thank all those who have participated in the debate—and all those who have participated, with, of course, the exception of the Minister, have agreed with the amendment.

I agree with everything that the noble Baroness, Lady Williams, said. The noble Lord, Lord Swinfen, has an absolutely unanswerable case. If we can have "good cause" here, why can we not have "good cause" in relation to disabilities? The Government have no answer to that. All that they can do is not answer the point, which is exactly what the Minister did. Although he did not answer our case, we shall return to it.

I agree with all the points made by the noble Earl, Lord Russell, with the exception of two. I do not agree that it is worse to have no money and to starve than to be in prison—but that is probably just something personal to me, particularly given what we know about some of Her Majesty's prisons. I would prefer to be outside looking in rather than inside looking out.

I do not believe that the amendment deals with the problem of forced labour. It is this amendment and the next one put together which relate to forced labour, and we shall be coming to that point.

Therefore, I now turn to what the Minister said. I have to say once again that we have not had an answer. We shall not continue with our arguments now because it is much better if the Minister goes away, talks to his friends in the Box and tries to put an answer together. There must be a better answer, because the question is simple: why is it that failure to obey a jobseeker's directive by a person who has a jobseeker's agreement—let us look forward into 1996 or 1997, when the thing is up and running—does not result in an immediate cut in benefit, whereas if somebody who has a jobseeker's agreement—they will all have them in the end—is suddenly found to be not actively seeking work he will be subject to an instant cut in benefit? That is the question to which the Minister must find an answer, because we have not yet had one.

Finally, not only have we heard no answers, but the Minister has not dealt with the point that the provisions are not necessary. The Government do not like this to be mentioned, but there was a long period from sometime in the 1940s until the late 1960s or early 1970s when we had no jobseeker's agreements—people then were "unemployed", except that there were none. When there was a sufficiently high level of demand, less than 1 per cent. or 2 per cent. of our fellow citizens lay about not having a job. Everybody got jobs. I had 20 jobs in three years—

Baroness Hollis of Heigham

All at the same time?

Lord McCarthy

I got the sack from half of them. There was a time when there was a demand for labour in the economy and when we did not have to drive people into ever-increasing levels of activity—"wider still and wider shall thy availability be set, God who made the active make thee more active yet". That is what the Government believe—because there are no jobs and they have to keep driving people into further and further extremes of activity in order to pretend that there are jobs. We shall return to these issues on Report, but, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Brougham and Vaux)

Before calling Amendment No. 151, I must advise the Committee that, if Amendment No. 151 is agreed to, I cannot call Amendments Nos. 152 and 152A.

Lord McCarthy moved Amendment No. 151:

Page 14, leave out lines 13 to 19.

The noble Lord said: We come back now to forced labour. The noble Earl, Lord Russell, has tabled Amendment No. 152, with which my amendment is grouped, but, although agreeing with it, I shall leave that amendment to the noble Earl. The Government's amendment, Amendment No. 152A, is also grouped with Amendment No. 151 and, if I understand that amendment—I may not—it makes the situation marginally worse, although not significantly worse because, God knows, it is bad enough.

We are seeking to delete what I call the "compulsory training clause". The provision states that if, without good cause, you fail to avail yourself of a reasonable opportunity of a place on a training scheme, if you give up such a place, if you fail to attend or so on and so forth, you will lose your allowance. I daresay that when we get to Report stage the Government will table an amendment to say that if you go on a course and fail to get a pass mark, you will lose your jobseeker's allowance.

Until I became involved in the Bill, I was not aware of how far this practice had gone, but we believe that quasi-compulsion has already gone a very long way. Attendance on an approved training programme is compulsory. That is all right because so far the only approved training programmes are YT and there are not many. Restart interviews are compulsory. They have been compulsory since January 1991. In other words, if you do not attend one of your compulsory Restart interviews, you lose allowance because you are not "seeking". Job plan workshops are compulsory, and have been compulsory since January 1992. Workwise and Worklink are compulsory. For some reason they have different names in Scotland and in England; God knows why. So, we already have built into the system a series of compulsory attendances. If the jobseeker does not do those things regularly as specified—as increasingly specified—he will lose his allowance. As a result, we are told that a 40 per cent. reduction in benefits is imposed on many workers who have been two years on the unemployment register, and there has been a significant increase in the number of disallowances.

In 1993–94, there were 15,699 reduced benefit disallowances. There were of course other things happening, but we believe that as a consequence of the increased compulsion, and the specification of what unemployed workers had to do, those disallowances rose to 40,438. They more than doubled in that short period. Yet the Government propose a major extension of compulsion. The Government now say that failure to go on an employment programme, which is not even necessarily training, could be a reason for disallowance. Training for work will be made compulsory. Attendance at job clubs could be compulsory. The intention is to make it compulsory.

What is the evidence that we need ever greater compulsion? What is the evidence of abuse? What is the evidence that workers, without that level of compulsion, in the 1980s and 1990s will not seek work, whereas in the 1940s, 1950s, the 1960s and the 1970s they did seek work? There is no such evidence. There is no such evidence in the CBI survey, the ESRC surveys, the OPCS surveys or the Department of Employment's own 1992 Employment in Britain study. None of those surveys suggests that there is an outbreak of an unusual number of workers who do not want to be active, to be available, and who do not want to work.

If there were, we know that the Government would be quoting the evidence at us, night after night in these debates, but there is no evidence. Therefore we say that there is no case for a compulsory movement of this kind. We say that this direction, together with the direction about which we talked on the previous amendment, constitutes something close, as the noble Earl said, to a compulsory work state. That is where we have reached, and that is why I beg to move.

Lord Inglewood

I shall speak to Amendment No. 151 and government amendment No. 152A. The kind of circumstances which Amendment No. 151 seeks to delete have long been a feature of unemployment benefit legislation under different governments. Those circumstances are currently set out in Section 28(1) of the Social Security and Benefits Act, and indeed the Government's Amendment No. 152A seeks to make the correspondence with Section 28 even clearer. Both sides of the Committee, I think we can agree, have accepted the importance of sanctions in this area.

The amendment would reduce our ability to ensure that unemployed people take appropriate steps to assist their return to employment. Jobseekers could refuse to take advantage of the help offered through employment and training programmes. The vast majority of jobseekers, of course, welcome and make full use of such assistance. Sanctions would never be applied to those people. Experience shows, however, that a small minority does persist in refusing the help offered, without taking other sensible steps. For them, of course sanctions are important.

The noble Lord, Lord McCarthy, talked about the increase in disallowances. The important point is that no one need be disallowed. It is jobseekers' actions which trigger off a change in their circumstances. Job plan workshops and restart courses, for example, will both be prescribed in regulations. People who refuse to attend or complete those mandatory courses without good cause, will therefore be denied JSA for a fixed period of two weeks, rising to four weeks for subsequent refusals. The Government believe that it is right for there to be a disincentive for rejecting provision which is designed to help motivate and prepare unemployed people, especially long-term unemployed people, for their return to the labour market.

I should like to reiterate and refer to the points that I made about workfare in the previous debate. The noble Lord, Lord McCarthy, referred also to employment programmes. I want to put on record that the test of an employment programme is that its predominant purpose is to assist the jobseeker to get back to work.

I shall turn now to government Amendment No. 152A which relates to the sanction that applies when people without good cause refuse or fail to apply for, or to accept, a place on a prescribed training scheme or employment programme. It is designed merely to carry forward all the circumstances relating to training schemes or employment programmes set out in Section 28(1) (f) of the Social Security and Benefits Act 1992.

It was always the intention that all the circumstances relating to schemes and programmes set out in the current legislation should be carried forward into ISA. This amendment makes that clear in relation to failure to apply for a training place.

The amendment also makes it clear that the place must be notified to an applicant by an employment officer, which brings the provision into line with Clause 16(6) (c) in relation to refusal or failure to apply for an employment opportunity. I commend that amendment to the Committee.

Baroness Williams of Crosby

I was interested in what the Minister said in relation to Amendment No. 152A where the Government recognise the importance of notifying the jobseeker that a vacancy has arisen. I wonder whether he now sees the logic of applying that to the situation of warning people in writing about the possibility of their benefit being disallowed. It seems to me that the argument in both cases is in favour of notifying people who may otherwise not realise what is happening.

I shall not move Amendment No. 152 with regard to "suitable" training places but I wonder whether the Minister will say anything about that. Earlier, the Minister dealt with a situation where no suitable training place is available. Is the fact that a training place is available sufficient to meet the conditions?

Lord Inglewood

I am afraid that I did not hear the last point made by the noble Baroness.

Baroness Williams of Crosby

There is reference to a training place on the face of the Bill. Therefore, at least in theory, if a number of training places are available in a particular region, which are still vacant, although it may be that they in no way match the various qualities or capabilities of the person seeking a job, that person could be held responsible for not having taken up that vacant training place.

Lord Inglewood

We come back again to our old friend "good cause". Under those circumstances it seems to me that there is no doubt that the person would have good cause in not pursuing the matter further. Amendment No. 152 would prevent any sanction being imposed unless the place in question was "suitable". The word "suitable" would apparently not be defined further and we do not believe that it adds anything to the provision. As I explained, where some aspect of the training is unreasonable the claimant could argue that he had good cause for his actions. I hope that that answers the noble Baroness's question.

Lord Lyell

Perhaps my noble friend will assist me as to the word "notify" in Amendment No. I52A. Is there a set procedure to follow so that the applicant is notified of any vacancies? I believe that Amendment No. 152A does not change the current climate.

Lord Inglewood

I can confirm to my noble friend that that is the case. To notify somebody implies that they are actually seized of the information which one is trying to transfer to him.

Lord McCarthy

It is quite disgraceful. I should like the Minister to go away and produce evidence. As far as I know there is no evidence whatever that a significant element of compulsion has been a permanent feature of employment administration. Looking at my list, all of the areas in which compulsion operates at present, with the possible exception of YT, were invented by the noble Lord, Lord Young, when he was at the Department of Employment. The continuous cycle of restart and restart was invented by the noble Lord, or he told the department to invent it. There were job clubs and more job clubs. All those provisions were invented in the 1980s, as are the proposals now to extend all that to job plan and workstart. It is a form of busybodying and interference in the problems of the unemployed. That goes back to this Government and no further. Unless I am given absolutely convincing evidence, I would argue that the element of compulsion starts with this Government. It is a monstrous libel not merely on Labour governments but also on previous Conservative governments to say that there has been a long tradition of compulsion in the Employment Service.

Apart from that, the Minister appears to have no argument at all. He certainly does not try to explain the rising number of disallowances. In fact, he says that there need not be those disallowances. However, the fact is that the number of disallowances has more than doubled in a very short period. The most notable event that has taken place in the Employment Service is a move to compulsion. As a result, there are more disallowances. The Minister has afforded me absolutely no explanation or apology for that. Indeed, he says that somehow it justifies the Government continuing with their actions. Therefore, although it is twenty past nine at night, I cannot agree to withdraw the amendment. I shall divide the Committee.

9.20 p.m.

On Question, Whether the said amendment (No. 151) shall be agreed to?

Their Lordships divided: Contents, 18; Not-Contents, 41.

Division No. 2
CONTENTS
Airedale, L. Lawrence, L.
Carter, L. [Teller.] McCarthy, L.
Cocks of Hartcliffe, L. McNair, L.
Dean of Thornton-le-Fylde B. MonKswell, L.
Redesdale, L.
Desai, L. Ritchie of Dundee, L.
Falkland, V. Russell, E.
Farrington of Ribbleton, B. Seear, B.
Graham of Edmonton, L. Williams of Crosby, B. [Teller]
Hollis of Heigham, B.
NOT-CONTENTS
Abinger, L. Inglewood, L.
Addison, V. Kingsland, L.
Annaly, L. Leigh, L.
Balfour, E. Lindsay, E.
Blaker, L. Long, V. [Teller.]
Blatch, B. Lucas, L.
Brougham and Vaux, L. Lyell, L.
McCollofDulwich, L.
Carnegy of Lour, B. Mackay of Ardbrecknish, L.
Carnock, L. Mackay of Clashfern, L. [Lord Chancellor]
Craigmyle, L. Marlesford, L.
Cranborne, V. [Lord Privy Seal.] Miller of Hendon, B.
Northbourne, L.
Denham, L. Rawlings, B.
Dixon-Smith, L. Renton, L.
Downshire, M. Rodger of Earlsfeny, L.
Ferrers, E. Seccombe, B.
Goschen, V. Shrewsbury, E.
Henley, L. Skidelsky, L.
HolmPatrick, L. Strathclyde, L. [Teller.]
Howe, E. Trumpington, B.

Resolved in the negative, and amendment disagreed to accordingly.

9.28 p.m.

[Amendment No. 152 not moved.]

Baroness Hollis of Heigham

As Amendment No. 152A is grouped with the previous one and the previous one was defeated, I think that by the convention and Standing Orders of this Chamber this amendment now falls. The Minister gave no indication when speaking that this was separate from the others. We voted on the first amendment in the group and that fell; therefore the entire group falls.

Earl Russell

I do not think that is correct. The rule is that, if it is consequential upon the first amendment, then it is also carried or defeated as the case may be. I do not think that this is consequential and I do not think either the noble Baroness or the Minister would wish to think that their amendments were consequential upon each other. I think the Standing Order which prevails is that it is always open to—

The Deputy Chairman of Committees

I said that if Amendment No. 151 were agreed to I could not call Amendments Nos. 152 or 152A. Therefore I can now call Amendment No. 152A.

Lord Inglewood moved Amendment No. 152A:

Page 14, line 16, leave out ("refused or") and insert ("after a place on such a scheme or programme has been notified to him by an employment officer as vacant or about to become vacant, refused or failed to apply for it or to accept it when offered to him: ( )")

On Question, amendment agreed to.

[Amendments Nos. 153 and 154 not moved.]

9.30 p.m.

Lord Carter moved Amendment No. 155:

Page 15, line 2, at end insert ("( ) prescribe circumstances in which a person is to be regarded as having good cause if he leaves employment to take up caring responsibilities.").

The noble Lord said: With Amendment No. 155 we come to the important question of carers and their connection with the jobseeker's allowance. The purpose of the amendment is to ensure that a person who leaves work because of caring responsibilities will not be treated as having voluntarily left work without just cause and hence disqualified from JSA. The wording may not be perfect, but I believe that the Committee will understand the purpose of the amendment.

I remind the Committee that only last Friday the other place discussed the Carers (Recognition and Services) Bill, a Private Member's Bill which I believe the Government support. In that debate (at col. 426 of Commons Hansard for 21st April) it was pointed out that an estimated 1.5 million carers provide care for 20 hours a week or more and that that caring army of 1.5 million people is a larger labour force in our welfare society than the entire labour force of the National Health Service and the social services departments combined. If the Minister refers in his reply to the public expenditure arguments we should remember the billions of pounds that are saved for the public purse by carers.

I turn now to the detail of the amendment. Many carers are forced to leave work because of the pressure of their caring responsibilities at home. The fear is that, without clear guarantees, those carers may be deemed to have voluntarily left employment and then may be disqualified from JSA. Many people with caring responsibilities try to combine paid work with caring. An estimated 13 per cent. of all individuals in paid employment also have a caring responsibility. There are an estimated 3 million worker carers in the UK. Many working carers are excluded from the figure which was mentioned in the other place or are subsumed in that figure. Many of those working carers face intolerable stresses and strains in trying to combine their paid work with caring. Eventually, the strain can become too much and carers may be forced reluctantly to give up work altogether.

A survey by Caring Costs, an organisation which campaigns for an independent income for carers, showed that 53 per cent. of carers had given up work to care for a relation at home; 50 per cent. of carers who were still working experience increased stress as a result of their caring responsibilities; 28 per cent. said that the quality of their work had also suffered; and 40 per cent. were unsure whether they could combine paid work with caring.

Some carers who give up work to care will still want to be considered as jobseekers, but their claim may be affected if they are considered to have: voluntarily left … employment without just cause". The purpose of the amendment is to find out from the Government whether their claim would be affected.

I am advised that the Carers National Association already receives telephone calls from carers who have been told that they have "left work voluntarily". However, as all the evidence illustrates, there is often no choice for carers who leave work either because they can no longer bear the strain of combining work and caring or their relation's care needs have increased. One has only to think of people caring for relations with Alzheimer's disease, motor neurone disease or other such conditions, to recognise that.

We believe that the Government should give some guarantee that a person who leaves work because of caring responsibilities will not be treated as voluntarily leaving work without just cause. The Carers National Association and Caring Costs have quoted a number of cases which I do not have time to quote but which illustrate extremely well the anxiety which exists on this matter. I hope that when the Minister replies he will be able to give a satisfactory response. I beg to move.

Lord Swinfen

My noble friend may care to reflect on the fact that, if the Committee agrees the amendment, there will be 12 occurrences in this clause alone of the expressions "without good cause" or "without just cause", I 1 of which he himself has drafted.

I strongly support the amendment, bearing in mind the current idea of moving people out of hospital as quickly as possible. Very often a relation at home may have to leave work in order to care for the person discharged. He or she may need care for some weeks. Once the period of caring is over, the individual will wish to return to work.

For instance, a schizophrenic, or someone who has a debilitating or disabling disease which occurs from time to time with greater or lesser severity, may need imtermittent care. Again, the carer may find that he has to move in and out of work to care for that relation. Another individual may have to care at home for a terminally ill relation, perhaps for an unknown period. It may be wiser to give up the job; alternatively, the firm for which the individual works may not wish him to continue on permanent unpaid leave and may have to get someone else in. The amendment, or some similarly worded provision, is essential.

Lord Inglewood

I appreciate the purpose underlying the amendment, but I can assure the noble Baroness that the amendment is not necessary.

The concepts of good cause and just cause in relation to sanctions are well established. No sanction applies to refusing employment if the claimant had good cause for doing so, and no sanction applies to leaving a job voluntarily if the claimant had just cause for doing so.

The amendment would enable regulations under Clause 16(8) to prescribe circumstances in which a claimant has good cause for leaving employment to take up caring responsibilities. As the noble Lord, Lord Swinfen, pointed out, and it is worth reminding the Committee, in leaving voluntarily cases the claimant has to show just cause, rather than good cause, in order to escape a sanction. This has always been a tougher test under Governments from both sides of this House.

It may be sensible to refer only to just cause here. Guidance on just cause is at present contained in case law and the chief adjudication officer's guidance to adjudication officers. Claimants should avoid unnecessarily becoming a charge on the national insurance fund, and should normally seek to secure new employment before leaving their existing job. It has, however, long been recognised that a person's personal or domestic circumstances may become so urgent as to provide just cause for leaving without any regard to the question of other employment. That can, of course, include a sudden need to care for a close relation where there is no one else in the household to undertake the duty. An adjudication officer should consider each case on its merits, but case law already makes it clear that caring responsibilities can constitute just cause for leaving a job. When they do so, the claimant is not subject to a benefit sanction for leaving.

It is important that I point out that those responsibilities may in themselves cause doubts about the claimant's availability for work. People who are not available at all or who have substantial caring commitments are of course not in the labour market and cannot be eligible for JSA; the appropriate benefit for them will be invalid care allowance. There will, however, be other people whose caring responsibilities cause them to restrict the number of hours of work that they can do, but who can still play an effective part in the labour market.

The present rules on restricted availability make no special provision for people in this position. I am, however, pleased to say that for JSA we shall allow people with caring responsibilities to restrict the number of hours for which they are available to less than the normal expectation of a minimum of 40 per week.

Given that explanation, I hope that the noble Lord will agree to withdraw the amendment.

Lord Carter

Before I do so, the Minister used the phrase that the adjudication officer has to be satisfied that, there is no one else in the household to undertake the duty", of care and responsibility. There were cases referred to in another place. Indeed, there was a television programme about the large number of children who act as carers. The responsibilities that they carry at times are quite horrifying.

Will the Minister confirm that the phrase "no one else in the household" will not be taken to mean that if there is a child of 10 or 12 in the household—and there are carers as young as that—the person should lose JSA?

Lord Inglewood

Under those circumstances they would not be included in the household.

Lord Carter

That is extremely helpful. We have it on the record. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McCarthy moved Amendment No. 156:

Page 15, line 3, leave out subsection (9).

The noble Lord said: Amendments Nos. 156 and 156A are grouped together, the first is ours and the second is in the name of the noble Earl, Lord Russell. I shall have to comment on both because in a sense they could be said to go in different directions, although both could go together.

Our Amendment No. 156 is to leave out subsection (9) which states: Subject to any regulations under subsection (8), in determining whether a person has, or does not have, good cause or (as the case may be) just cause for any act or omission, any matter relating to the level of remuneration in the employment in question shall be disregarded". In other words, no applicant or would-be beneficiary could refuse the job on the grounds that the money is too low, however low it may be. We wish to take that out, it is quite unnecessary and I shall say why in a moment.

Presumably the noble Earl's amendment leaves that in and I am not sure what would happen if we were able to omit the subsection. The legislation provides that, the level of remuneration in the employment in question shall be disregarded". Nevertheless, the noble Earl's amendment proposes that: regard shall be given, in the light of employment opportunities, to the person's education, training and experience". I am happy to accept Amendment No. 156A if the Government reject Amendment No. 156, with which I am dealing. If subsection (9) were left in the Bill, as I understand it there is no limit to the kind of offer which could be made to an unemployed person, a jobseeker, which he could turn down on the grounds of the rate of pay and I accept that it is beyond the prescribed period. However, that cannot be right. It must be wrong to say that a person cannot turn down a job with an hourly rate below that of the JSA or lower than the hourly rate of the hardship allowance, if we work it out, or the lowest rate of income support, or any rate at all. What about a rate of 5p an hour? That cannot be right. Surely the Government do not mean that the level of remuneration after the prescribed period can be totally disregarded in deciding whether or not the offer of a job is reasonable. I beg to move.

The Deputy Chairman of Committees

In calling Amendment No. 156 I should have reminded the Committee that if that amendment is agreed to, I cannot call Amendments Nos. 156A or 157.

Earl Russell

I hasten to reassure the noble Lord, Lord McCarthy, that it is purely a matter of inadvertence that my name is not to his amendment. I intend to support it now. I do not intend to move Amendment No. 156A which I believe we agree is simply appalling.

Amendment No. 156 has got it right. First, the Government frequently tell us that they believe in a free market, but if there is to be any kind of free market one cannot have captive labour. That is what we have here. If labour is to be forced to take jobs at wages however low the employers choose to put them, we are preventing a free market from operating. That seems to me rather a mistake. If there is to be a lack of freedom in the market, it ought to apply to both sides, not just one.

Secondly, the Government are pickling a financial rod for their own back. We have a system of in-work benefits which is right, but it creates an incentive for the employer to push wages lower and lower in the hope that in-work benefits will make up the difference. It creates an invitation for the employer to free-load on the state. In a competitive world, people are subject to these pressures and may occasionally respond to them. The Government may find that this provision costs them a great deal more than they think it will. That is rather unwise.

Finally, even if the Minister cannot go any further, I hope that he can give us an assurance that people will not be required to take jobs which pay commission only. If you are looking for a job and you find work in, let us say, telesales, you may be under a very heavy pressure of commission incentive payments. One really ought not to force people to sweat their hearts out for a return of, if they are lucky, £1 or £2 a week, in a country which prides itself on some sort of freedom, both economic and political. I hope to hear that the Minister agrees.

9.45 p.m.

Baroness Farrington of Ribbleton

I speak from knowledge of a part of the country, Lancashire, where there is a very high incidence of low pay. Low pay is determined by government in terms of the need to supplement people's incomes.

In coastal resorts such as Blackpool advertisements are frequently seen for jobs in which, for a 40-hour week, people are offered less than £100. A case was cited today at a council meeting of a job requiring a mature person with experience, for a 40-hour week, offering £70. This sort of instance is bound to multiply if people are forced into such jobs.

I do not think it is an exaggeration to say that there comes a point where such jobs amount to slave labour. If the Minister argues that that will not be the case, he must then indicate what safeguard there is, what financial hurdle there is below which the jobseeker cannot be required to go.

In a reply at Question Time the other day, the Minister said (I believe these were his words) that there was no relationship between the income that people obtain from the jobs that are available and their ability to sustain their specific family circumstances. But surely it is essential that employers do not exploit people. As the noble Earl, Lord Russell, said, the situation is that people are now being forced into employment. In some parts of the country people will be particularly vulnerable. Sections of people are unemployed through no fault of their own but because the industry in which they work is one that has not yet recovered from the recession. An example is the construction industry. I hope that the Minister will be able to indicate that the Government accept the level that is set within this amendment as an absolute minimum.

Lord Inglewood

This amendment, as was described, would remove Clause 16(9) which states that, except as prescribed, the level of remuneration cannot constitute a reason for matters such as turning down a job offer or leaving a job voluntarily. It would enable an adjudication officer to take the level of remuneration into account, determining for example whether a claimant had a good cause for refusing particular employment.

In fact, the Bill simply carries forward current provisions. The Benefits Act already provides that the level of remuneration cannot normally be adduced as good cause for refusing a job. The Government introduced this provision following the radical overhaul in 1988 of the benefits available to people in full-time work. Those benefits—family credit, housing benefit, council tax benefit, disability working allowance—enabled the great majority of people to be better off in work than remaining unemployed. Ministers provided worked examples to the committee in another place which clearly demonstrate that that is so.

This amendment seems to ignore the effect of in-work benefits. It is illogical for someone to be able to rely solely on the level of pay in a job as the reason for refusing to take it. Levels of pay take no account of family circumstances. In-work benefits do. The amendment would allow people with large families to trap themselves in unemployment indefinitely.

The 1994 IFS study showed no evidence that family credit influences wage levels. It helps over half a million families a week and has improved incentives significantly. That does not mean that we claim that the level of pay is completely irrelevant. The Bill contains two separate safeguards. First, we are carrying forward the concept of the permitted period. We believe that newly-unemployed people should be given a reasonable chance to return to their former type of work. Therefore, the Bill provides that people with a usual occupation have a permitted period of up to 13 weeks during which they cannot only refuse any other type of work, but also work in their usual occupation that pays less than they used to receive. Secondly, we have written into the Bill that the refusal of employment sanction can operate only if the job has been notified to the claimant by the employment officer. Ministers have made it quite clear that the Employment Service will not set out to offer people inappropriate jobs.

It is also the case that claimants cannot expect to hold out indefinitely for a level of pay that may simply be unrealistic, given their length of unemployment. As time goes on they will need to lower their expectations or they may be trapped in unemployment indefinitely. I hope and believe that these safeguards offer adequate protection. For those reasons I must oppose this amendment.

Lord McCarthy

Because it is late at night, or perhaps because the Minister has lost a piece of paper, what has been said is appalling. He has not given any answer. To refer back to 1988 is not a justification. What he means is that it has been going on for a long time, and it is dreadful. If it is said that there is no limit on what an unemployed person can say he will not accept after the prescribed period, that is appalling. To say that it has been going on since 1988 is no justification. We may as well say that we have been shooting them since 1988. If I hear him right, I think he says as much.

The Minister said that the benefits Act could not normally take levels of pay into account; in other words, exceptionally it did. Therefore, awful though it has been since 1988, it is not as awful as it is going to be. As I understand it, the clause says that it "shall be" disregarded, not "normally" disregarded. The Minister also talks about family circumstances and in-work benefit. What does that have to do with it? If he said that if there was sufficient in-work benefit and suitable family circumstances it would not be taken into account, he would not have much of a case but he would have a bit of a case. But the clause says "shall be disregarded", whether one has family or any other circumstances.

The fact is that they do not have any answer but they have no shame. One can think of dozens of examples. For example, one may have kids who are employed as waiters and are paid nothing but scruffy tips. Is that perfectly all right? If that happens and somebody says that he will not just be a waiter and get scruffy old tips, will he be told that he will have no JSA? Kids knock on my door to sell me pieces of rubbish. I have to buy it because they look so pathetic. Is that all right? I do not know whether or not they get any money, but as long as they get a farthing that will do. If they do not take that job they will have no JSA. This situation is absolutely appalling, and we will come back to this matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 156A not moved.]

Baroness Hollis of Heigham moved Amendment No. 157:

Page 15, line 6, at end insert ("; provided that the level of remuneration is at least equivalent to the level of jobseeker's allowance payable")

The noble Baroness said: Amendment No. 157 pursues the same issue. However, in this case, to use a favourite phrase of the Government, the amendment is more precisely targeted on the issue of the interface with JSA allowances. It is not unreasonable to ask people, as part of a jobseeker's agreement, for what wage they are willing to work. We accept that that is a relevant piece of information. What is not reasonable is to deny people jobseeker's allowance on the grounds that the wage for which they are willing to work would make them worse off than they would be if they were on benefit.

The Government have repeatedly said—we heard it again on the last amendment moved by the noble Lord, Lord McCarthy—that the level of pay is not a good reason for refusing work. I can only ask the Minister, given the examples quoted by my noble friends Lady Farrington and Lord McCarthy, what world they live in. What world do they live in? We are not talking about unrealistic pay expectations. Nobody is saying that it is reasonable to say, "I will only work for £20,000 a year" and that that is a reason for not accepting any job which pays less. The Government are telling us that it is entirely reasonable to accept a job which, by the Government's definition, pays below the poverty line—and a very low poverty line it is.

I accept—the Minister reminded us of it earlier tonight—that for those with children there is the in-work bonus of family credit. It is obviously right that those with children, who therefore need a higher income than those without children, should not thereby be priced out of the labour market. But, what we are doing there is helping them not by subsidising their wages (which would be quite improper) but subsidising the additional cost of having children, just as we do with child benefit, because that is a social responsibility. We are not asking them to price themselves out of the market in competition with single men and women.

We know that the Minister will tell us about the proposed piloting in some places of in-work benefit for childless people. We have already expressed reservations on that. But, at the moment, those without children (both single people and couples) have the alternative of income support and related benefits to low waged work. But they will not have it any more—not after this Bill has been passed. Wages have been falling, and the abolition of the wages councils has removed the checks on that, along with the growth of part-time jobs, commission-only jobs and the pay of those under 25. We know, and my noble friend Baroness Dean reminded the Committee of it much earlier, that 1 million people now earn less than £2.50 an hour. We know that 300,000 people earn less than £1.50 an hour. A Manchester study last year showed that 50 per cent. of all jobs advertised in the local Jobcentres—I repeat 50 per cent.—paid less than £100 a week. Across the country, a third of those jobs advertised in Jobcentres paid less than £57 a week, which is the point at which one starts to pay the national insurance contribution.

On top of that is the fact that rents, council tax, fuel costs and the like have not been falling while wages have been falling. So, those very low wages for those with children have had to be topped up with additional payments from housing benefit and council tax benefit. But at least until now income support served as a basic floor below which wages could not descend because the choice remained with the unemployed whether to accept a job or income support. It was a threshold below which wages could not fall.

If people are required to work for wages below income support and associated benefits, especially if you ensure the prospect that wages will be topped up by the state, the situation becomes very simple: employers can pitch wages wherever they wish, knowing that the state will pick up the bill and subsidise their wages for them. The Minister shakes his head but that is absolutely right. That is why it is so pernicious. At the same time that the Minister is privatising public responsibilities and passing them on to business, such as sickness and related problems, the Government are nationalising what should be a private or commercial responsibility; namely, the payment of wages. It is quite remarkable.

Why do the Government believe that the cost of in-work benefits has doubled in the past four years and now stands at £2.4 billion? One in 50 of the workforce now claims in-work benefits such as family credit. One in seven of those in catering, cleaning and hairdressing—the old wages council industries—now claim family credit. With the abolition of wages council industries those jobs no longer pay a living wage. It is quite remarkable. Here are the Government seeking to save £140 million in cuts in JSA while at the same time transposing costs onto other in-work benefits such as family credit, which will cost us all as taxpayers infinitely more than the Government will save in their costs through the Jobseekers Bill. They are willing to throw public money at employers to allow them to cut wages where they will. Instead of a problem of a dependency on benefits out of work, we will have created a new problem of dependency on benefits in work.

This policy of the Government's can only be justified on two grounds: first, where the employer really needs to face additional costs or needs subsidy to take on particular groups of working people. He may need help with aids for the physically handicapped. He may need help with a recognition of low productivity for those with learning disabilities. He may need a bonus to coax the long-term unemployed into work. We accept that there can be special circumstances and we do not object to that.

The second reason is to lower wage levels to increase the total supply of jobs available and thus take more people off social security. Is this second reason valid? There is no evidence for that and much evidence to the contrary. All that happens is labour substitution. No more people are employed but cheaper people may be employed, as has happened with compulsory competitive tendering. Because they are dissatisfied with work and pay conditions, there is a rapid turnover and there is no incentive to train them or keep them. Indeed, the Low Pay Unit found that employment in hotels actually fell after the wages councils were abolished. Overall, the number of jobs covered by the former wages councils has fallen by 18,000 between September 1993 and March 1994.

The argument of labour substitution and increased competition does not generate more jobs. It simply generates more profits for employers to distribute to shareholders and in options. All the evidence from Europe is that without a minimum wage to underpin the job market the Government are throwing taxpayers' money at the employer as an invitation for him to put wages where he will, knowing that the taxpayer will pick up the rest of the bill. If this week, this month and this year we are cutting JSA, the next Bill we will have to pass, because the Government will require it, is one to cap in-work benefits, which will have escalated, much to the Government's surprise, because of the workings of this one.

We object because the Bill will either push up DSS benefits or, if one cannot claim those benefits because of the 16 or 24-hour rule, it will require the single person or the couple to live well below the poverty level. Neither of those options—desperate poverty or a wage bill subsidised by the taxpayer—is acceptable. Of a pernicious Bill, this is one of the most pernicious aspects of the entire jobseeker's allowance. I beg to move.

10 p.m.

Earl Russell

When the noble Lord, Lord McCarthy, was replying to the last amendment and was talking about being compelled on pain of losing JSA to live on scruffy tips, I was very much encouraged to see the Minister shake his head. Perhaps I may invite him to put on record the reasons why he shook his head and whether those will cover the question of commission only, about which I asked him.

The point that the noble Baroness made about the lower earnings limit in national insurance is particularly important. Just as in-work benefits without a floor under wages are a financial laxity for any government, so forcing people to take jobs which pay below the lower earnings limit for national insurance is a financial swollen throat so bad that it is impossible to swallow.

When we looked at the statement about the Public Sector Borrowing Requirement last month, it was interesting to note that what was falling short was not spending rising faster than expected, but revenues not rising as fast as expected. I have a Question for Written Answer asking under what headings that shortfall happened. The point which the noble Baroness has made prompts me to ask the Minister whether he will look at the Answer to that Question and see how much of the shortfall is in national insurance. How much of that shortfall is the direct result of government policy?

Lord Inglewood

It seems to us that the amendment is based on the belief that the Bill is designed to force people into work that would leave them worse off than staying unemployed. In fact, as I described before, the Bill simply carries forward the current provisions under Section 28(5) of the Benefits Act which I have already mentioned.

We have heard a considerable amount of hypothesis from the noble Baroness opposite. I wish to reiterate what I said during the debate on the previous amendment that the 1994 IFS study showed no evidence that family credit influences wage levels. That is important because it cuts at the basis of a very great deal of what the noble Baroness argued for. Equally—

Baroness Hollis of Heigham

The reason that family credit affects wage levels is that the person with children may very well be in competition with someone who can turn to income support. At present where that is not the case their wages will be pushed down and family credit will have to pick up the strain.

Lord Inglewood

I do not accept that. Let us have some economics from our side of the Committee. If we are to pay people they have to earn it and that can only be done with competitive business. That is the key to ensuring that we get a decent standard of living throughout the country which is as high as we can possibly make it. When one considers take-home pay in this country and the cost of living is taken into account, take-home pay in the United Kingdom is among the highest in Europe. The take-home pay for the bottom 10 per cent. of full-time wage distribution is now 23 per cent. higher in real terms for a single man than in 1979. It fell by 1 per cent. under Labour. The important point here is that we must have an effective labour market.

Baroness Farrington of Ribbleton

What about the bottom 10 per cent.?

Lord Inglewood

Perhaps I may continue. We must have an effective labour market because that is what will achieve the desired improvement in our economic performance. That is one of the fundamental principles behind the Bill. Let us not forget that we have to go back and look at the context in which this matter is set. We are talking about Clause 16(9). A great deal of what has been referred to by Members of the Committee in talking about pay flows much wider than pay and goes to the very heart of the job itself. If the circumstances described are sufficiently severe to fall within the scope of good cause and just cause, then it is perfectly reasonable for the person concerned to refuse the job.

As I said earlier, one cannot expect to continue looking indefinitely for a job doing the kind of thing originally wanted, at the level of pay desired. One must widen the job search.

Lord McCarthy

Is the noble Lord saying that, despite what is on the face of the Bill about totally disregarding pay after the permitted period, somehow he has found somewhere in the Bill where one can say, "I shall not take a job because the money is too low"?

Lord Inglewood

No. The kinds of things which were being described went much further than that, did they not? If it is unreasonable for someone to take that job then the good cause/just cause provisions come into play.

Lord McCarthy

This whole arrangement, which is insupportable, must be an arrangement which does not include pay because pay has been taken out. But there cannot be a whole arrangement if pay has been taken out.

Lord Inglewood

Pay is the amount of money that we are talking about, but there are also the terms and conditions of the job. Some of the examples that have been given may have had a bearing on pay, such as if someone is working on a commission-only basis, but it is not merely a question of pay. Other matters are involved—

Lord McCarthy

So is the noble Lord saying that you can refuse a job because it is too dark and too smelly and because you cannot get your bike in, but you cannot refuse a job because the pay is bad?

Lord Inglewood

No. The noble Lord seems deliberately to be misunderstanding the point that I was making. As I made clear in responding to the previous amendment, the Employment Service will not set out to offer people inappropriate jobs. If the job is inappropriate, it is perfectly in order for the person concerned to refuse it.

Baroness Hollis of Heigham

Will the Minister clarify one point? If you are a single person or a couple without children and therefore do not qualify for family credit and no in-work additional top-up will be available, is it appropriate to refuse a job which pays you less than you are currently living on when on JSA? Yes or no?

Lord Inglewood

No, I am not going to give a straight answer to that—

Baroness Hollis of Heigham

We bet you're not!

Lord Inglewood

—because a whole variety of other circumstances have a bearing on the matter.

Baroness Hollis of Heigham

What other circumstances would have a bearing on a pay level which is below income support?

Lord Inglewood

The noble Baroness refers to a series of hypothetical situations and is giving incomplete examples—

Baroness Hollis of Heigham

No!

Lord Inglewood

Yes you are! Like the amendments that we have just been discussing, this amendment ignores the effect of in-work benefits and the safeguards that are contained in the Bill which I have already described at some length. For that reason, I urge your Lordships to oppose it.

Earl Russell

Now that the Minister has sat down, this is a point of considerable importance and I think that we are entitled to ask for clarification. The Minister said that the Employment Service will not make people take inappropriate jobs. That must mean jobs which appear to the Employment Service to be inappropriate. The Employment Service, like the rest of us, is not infallible. If the Employment Service is going to judge appropriateness, we need to understand the criteria that it will use. Is it or is it not the case that one could refuse to take a job because the pay is too low or, in a commission-only case, because there is no pay at all?

I should like to ask the Minister one other question which would enable me not to speak to my other amendment. It relates to part-time work. A person may be required to take a job which lasts for fewer than 40 hours a week. How many fewer? I understand that the present law specifies 24 hours. Is that going to remain the case or is it not?

I have another point of considerable importance on which I should like to dwell for a moment while the process of osmosis takes place. Many people may be penalised for refusing to take part-time jobs which pay a very small amount of money because of benefit penalties which are a very great deal greater than the amount of money that they would have received from the job. That appears to me to be a rather excessive punishment and, whenever the Minister is in a position to do so, I should be extremely grateful if he could reply to my questions.

Lord Inglewood

The effect of current regulations is that people are not subject to sanction for refusing an offer of employment or for neglecting to avail themselves of a reasonable opportunity of employment if the employment concerned is for fewer than 24 hours a week. I can assure the Committee that the Government intend to continue that broad approach. People who refuse work that takes up fewer than 24 hours a week will not normally be subject to sanction. I hope that that gives a general reply to the noble Earl's question.

Turning to the other matters, the Employment Service operates in a reasonable manner—that is axiomatic to the debate—and, as I have already mentioned, it is not going to bring forward jobs which it considers inappropriate.

We have discussed many hypothetical examples which have not been fully fleshed out. While we may disagree about what would be inappropriate or reasonable, without having a full description of such cases it will not be constructive for me to try to give the Committee any lead about it. I dare say that in certain respects there is an unbridgeable gulf between us. Nonetheless, I urge the Committee to reject the amendment.

10.15 p.m.

Baroness Hollis of Heigham

I have two points to raise. First, the Minister seems to think that he has said something significant when he dismisses an argument as being hypothetical, or dealing with a hypothesis. What the Minster calls a hypothesis is what we are trying to predict will be the consequences of the legislation. To refuse to discuss that is to take his legislation out of the real world and away from the people it will affect, and to deal with it—if I may use the term perhaps inappropriately—in an academic sense.

This is a Bill which will affect real people. We seek to predict some of the consequences of the legislation. Whenever we do so, the Minister, in desperation, uses the word "hypothetical". Of course it is hypothetical. It must be hypothetical because the Bill is not yet law, thank God! But when it is, it will affect real people. It will not be hypothetical. We fear that many of the things we have predicted will come to pass, therefore I hope that the Minister will not regard the word "hypothesis" as taking the argument one step further, but will try instead to address the issue.

We accept entirely that there may be people, and there were people, with children who can accept a wage that may be below, say, income support level, because it will be topped up by family credit. The Minister said that is not a real problem, because there are in-work benefits. But the case I put to him excluded such people. I am talking about a single person, or a couple, without children, not entitled to any in-work benefits such as family credit. Is the Minister saying that as part of the JSA such people should accept a job which pays below JSA level, knowing that they will be worse off? We must push the Minister on that point. Will a single person, or a couple, who will not receive a family credit in-work benefit be required to accept a job that pays less than the JSA? Should such people willingly make themselves financially worse off?

Will the Minister please answer that simple question? It is not difficult. It was asked in the other place on many occasions. The Minister well knows what the question is. So far the Minister has regularly ducked, weaved and failed to answer it. We, and the people outside, are entitled to that explanation. Are they expected to work at a wage below the poverty level of income support, knowing that it cannot be topped up by family credit if they do not have children?

Lord Inglewood

I merely reiterate what I said before. No one should be allowed to hold out indefinitely for a given level of pay. The noble Baroness gives examples which she says are not hypothetical, and yet they are hypothetical because we are not changing current provision. She has not given a concrete example from the current arrangements. We do not believe it appropriate to insert minimum wage levels in this provision. It is clear that there is a gulf between us.

Lord Swinfen

I do not know whether my noble friend is aware that in the selling of cars in the motor industry there are a number of jobs with no salary, just commission. At certain times there is little likelihood of commission, because the newest person in will be the most junior who will not have built up a client base of his own. There will also be the temptation for employers to take on people at salaries lower than the state will pay.

I am sure that my noble friend realises that no one will be willing to accept a job paying less than the state will pay on benefit, because the person probably cannot afford it. He may well have a mortgage and commitments of one kind or another, all of which need to be taken into account. There are questions arising not just from the car industry but in other industries where the commission can be hefty, but it may be many months before one earns commission.

Lord Inglewood

The point about in-work benefits is that they are designed to make people better off than they would be if they were dependent wholly on the state. That is a crucial characteristic which cuts across the argument which my noble friend is making in that regard. As I said, we do not believe that it is appropriate to insert into this provision a minimum wage level. Therefore, that gulf exists between us.

Baroness Hollis of Heigham

Will the Minister please tell us to which in-work benefits a single person or a childless couple may be entitled, apart from housing and council tax benefits?

Lord Swinfen

Perhaps my noble friend will agree to consider this matter between now and the next stage. I am sure that Members on all sides of the Committee wish him to do that. He does not have to commit himself to anything but surely he will agree to consider the matter with his advisers.

Lord Inglewood

I shall certainly give the matter consideration but our position is very clear. We do not believe that it is appropriate to include in the Bill any form of minimum remuneration level.

Baroness Hollis of Heigham

Will the Minister answer my question? Which benefits are available to a single person or a childless couple? Which benefits does the Minister have in mind?

Lord Inglewood

Very few people in that category are worse off in work, but we have plans to pilot a new benefit for that group, as the noble Baroness knows.

Baroness Hollis of Heigham

I know that there may be pilot schemes in some areas but other people outside those areas will not be eligible for that benefit. Will the Minister please answer my question? To which benefits will a single person or a childless couple in work be entitled?

Lord Inglewood

I have already replied to the noble Baroness.

Baroness Hollis of Heigham

The Minister has done many things but he has not replied. At the end of this debate the Minister is accepting that he has no answer. From a sedentary position the other Minister says that he has an answer but we do not like it. The answer that we have been given is that a single person or a childless couple shall be required, may be required, or can be required to accept a wage for a job which is below the jobseekers' allowance. The Minister then says that to his surprise we do not like that answer.

The two Ministers should be ashamed of that answer. It is all right for us because we are all here. But the Ministers are saying that people out there without children may be required to work for a wage which even the Government recognise is below poverty levels and below income support levels. They then have the gall to say that there is a difference between us and that we are being unreasonable in failing to accept those answers.

That is truly, truly pernicious. I would use stronger language but parliamentary conventions prevent my doing so. I should be surprised if Members of the Committee can sleep comfortably tonight if they are willing to allow people to work for a wage below income support levels. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 157A:

Page 15, line 7, at end insert: ("() "employment" means employment of 24 hours or more per week in either employed earners employment or self-employment.").

The noble Baroness said: The amendment was referred to by the noble Earl, Lord Russell, earlier, even though it was not grouped with his amendment. It relates to the 24-hour rule. We would like assurances from the Minister regarding two situations. First, we would like to know whether those currently unemployed and seeking full-time work but who refuse part-time work will be sanctioned if they refuse part-time work of under 24 hours. Secondly, if someone gives up part-time work of under 24 hours, we would like to know whether he or she can be sanctioned. The Minister said that we are dealing in hypotheticals. Perhaps I may tell him about a case reported by the CAB. It concerns an unemployed man in his late 50s in Yorkshire who was doing a paper round for £5 a week which he was allowed to keep without jeopardising benefit because it was part of the disregard of income support. The man gave up the paper round because of bad weather during the winter. He had his benefit sanctioned by £18.30 for giving up a £5 a week newspaper round. That was a genuine case produced by the CAB; it is not a hypothetical one. It relates to something that already happens.

If the Government propose to sanction people for giving up part-time work, such people would be very wise not to accept that work. In the process they may fail to do what Members on both sides of the Committee wish them to do; namely, to regain access to the labour market. Therefore, can the Minister reassure us that those currently unemployed and seeking full-time work but who refuse work of under 24 hours' duration will not be sanctioned and that those currently in part-time work of under 24 hours will also not be sanctioned if they stop such work. I beg to move.

Lord Inglewood

As I explained previously, the effect of current regulations is that people are not subject to sanction for refusing an offer of employment or for neglecting to avail themselves of a reasonable opportunity of employment if the employment concerned is for fewer than 24 hours a week. I can assure the noble Baroness that the Government intend to continue that broad approach. People who refuse work of less than 24 hours a week will not normally be subject to sanctions.

Baroness Hollis of Heigham

In view of the Minister's response, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 158 and 159 not moved.]

Clause 16, as amended, agreed to.

Clause 17 [Exemptions from section 16]:

[Amendments Nos. 160 to 164 not moved.]

Clause 17 agreed to.

Clause 18 agreed to.

Lord Northbourne moved Amendment No. 164A:

After Clause 18, insert the following new clause:

("Carers of children under the age of two

For the purposes of this Act no person who is a mother nursing her child or a parent with the main caring responsibility for a child under two years of age shall be required to seek for, or to accept, employment other than the employment of caring for his or her child in order to qualify for the jobseekers allowance.").

The noble Lord said: I must apologise to Members of the Committee for the fact that I was not able to be present at Second Reading. However, I believe that the amendment, which is a probing amendment, raises a point of importance about which we need to have information regarding the Government's intentions.

There is substantial and increasing evidence to show that the quality of parenting in the first two years of a child's life is extremely important for emotional stability and for the child's sense of self-worth. Without them, children tend to have problems when they go to school and they also have problems with their personal relationships. That can, and very often does, lead to disruptive behaviour, problems of truanting, juvenile crime and so on; and, indeed, poor job prospects in the future. Therefore, it is very costly to the state and to society for children not to have an appropriate start in life.

There is also growing evidence that bonding between a child and its mother or surrogate mother, which may include the father, takes place in the first weeks of a child's life. The sense of predictability, security and love which a bonded relationship with a parent, or with a surrogate parent, gives to a child is fundamental to that child's successful rearing. All but the best childcare is a poor substitute for the latter; but the best childcare can, of course, be an appropriate substitute.

Caring for a one year-old or a two year-old child is a tough job. Giving each child a good start in life is surely an enormously important job for society and yet many mothers and fathers want to do it. This amendment does not force any mother or father to stay at home and look after their child; it merely enables them to do so without suffering a penalty if they want to do so. This amendment is gender neutral although I have taken the risk of suggesting that breast feeding would probably be undertaken by the mother. It would be perverse if this Government, who claim to care about children and about families, were to prevent parents, through economic sanctions, from giving their children the parenting they need through the functioning of this legislation. I beg to move.

10.30 p.m.

Baroness Williams of Crosby

I rise to support the amendment moved by the noble Lord, Lord Northbourne, for reasons additional to those he has already given, which I share. This is a group of jobseekers for whom it is particularly difficult to meet the directions that may be associated with a jobseeker's agreement. Any mother of a young child knows how difficult it is to move by public transport from one area to another carrying or dragging young children after one. The person concerned may not easily be able to get care from other quarters. It is often difficult to arrange childcare to meet the requirements of a job, especially if childcare or nursery arrangements simply do not fit in with the hours of that job. It is difficult to take night work and it is difficult to take weekend work. There are many difficulties that arise for parents of young children in this regard.

In addition to the arguments put forward so eloquently by the noble Lord, Lord Northbourne, there is a whole set of other arguments as regards parents of young children and their problems with meeting directions under a jobseeker's agreement, unless we have a full assurance from the Minister that no such directions will be made that are incompatible with caring for children of a young age. I do not think that it will be easy to do that. Therefore I suggest that the Government might want to look sympathetically at this amendment and the spirit in which it has been moved.

Lord Carter

There is a point as regards this amendment which we can discuss. It would be helpful if the Minister can clarify this when he replies. I think I am correct in saying that the current position is that a mother with a working partner, or no partner, is given 24 hours' notice in which to take up a job offer, and therefore would have to have the childcare lined up in preparation for being offered a job, and she could well be asked about this by the Employment Service adviser. This would be particularly unsatisfactory with regard to a child under two years of age, as the mother or the responsible parent may not have a trusted child minder or a relative with whom to leave such a young child at 24 hours' notice. It would be helpful if the Minister could reply to that point.

Lord Inglewood

Let me assure the noble Lord, Lord Northbourne, who is prominent in this field as vice chairman of the all-parliamentary group on parenting, and has been very much involved in establishing the Parenting Forum for parenting, education and support, that we recognise the role people with caring responsibilities can play in the labour market and that we have taken this into account in drawing up the JSA proposals. I cannot stress strongly enough, however, that JSA is for jobseekers and it is important that all unemployed people claiming JSA can fulfil the labour market conditions. This is an underlying principle of any unemployment benefit. In order to receive JSA, jobseekers will have to be able and willing to participate in the labour market.

In order to receive JSA, claimants will have to be available for and actively seeking employment. For the first time we are introducing an easement of the availability rule for jobseekers with caring responsibilities. We will set out in regulations that people with caring responsibilities will be able to restrict the hours of their availability because of these responsibilities. Carers will also, as will all jobseekers, be able to place restrictions on their availability, in terms of the location or type of work, provided that they still retain reasonable prospects of securing employment. I think that goes a long way to answering the point made by the noble Lord, Lord Carter.

It is essential that jobseekers should actively look for employment while they are in receipt of JSA. We recognise that all jobseekers are individuals and should be treated as such. Each individual will have different circumstances and it is important to reflect in legislation that different steps may be appropriate and reasonable in different situations. That applies to carers as it does to others.

Perhaps I may reassure noble Lords about our intention that, as now, a determination as to whether someone has met the actively seeking employment condition must be taken with regard to all the circumstances of the case, including caring responsibilities. One has to be actively seeking work, but in a way which may be different from the general case because of the caring responsibilities.

I should like to reassure the Committee that we value very highly the contribution made by parents who choose to devote their time to raising their children. We encourage flexible working patterns that enable parents to raise their children and participate in the labour market.

There is a wide range of benefits available for parents with caring responsibilities for very young children, including statutory maternity pay, child benefit and income support for lone parents. Let me make it clear that, where a lone parent claims income support, he or she will not be required to be available for or actively seeking work. Where a couple have children and one or both of the partners works, family credit is available for families with earnings below a certain level. These benefits recognise that families with children face additional costs compared with other families.

I hope that that reassures the noble Lord and that he will withdraw the amendment.

Lord Carter

Before the noble Lord decides what to do with the amendment, can the Minister answer directly the question that I put to him? Is it the case that a mother with a working partner or no partner has to have a child minder lined up so that if she is offered a job she can take it up at 24 hours' notice?

Lord Inglewood

Yes, it is.

Lord Northbourne

I am grateful to the noble Lord for that reply. I wonder whether the noble Lord has ever tried looking after a one year-old child alone. Does he suggest that that is not a job?

Baroness Hollis of Heigham

That is hypothetical.

Lord Inglewood

I believe that we can say with confidence that it is not; after all, we are all here. This is a matter of the definition of "actively seeking work" and being "available for work" which we went into at some length on a previous occasion. I do not say that because the noble Lord was not present.

Lord Northbourne

In that case, I think the noble Lord is saying that one has to be seeking paid work. Therefore, the effect of the scheme will be that the parent will have to seek paid work away from the home and then somebody else will seek the job of being the carer. That seems to me to be remarkably daft and certainly not in the best interests of the child.

Lord Inglewood

The key point about the JSA is that the first priority of the jobseeker is to get a job. JSA is for jobseekers. It is important that all those who claim JSA, including those with care responsibilities, are available for and actively seeking employment. For those who do not want to seek employment there is the income support system, which stands in parallel. That is the important distinction here. This Bill relates to people who want to seek work. In the "available for work" and "actively seeking work" conditions, special provisions are being introduced for carers.

Lord Northbourne

I am grateful to the noble Lord. I suggest that looking after a one year-old child is employment. However, I should like to consider the legislation and possibly to bring the matter back at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 [Supplementary Provisions]:

Lord Swinfen had given notice of his intention to move Amendment No. 165:

Page 32, line 40, at end insert: ("( ) for occupational or personal pensions to be disregarded, in the case of a disabled person.").

The noble Lord said: As it is late, I shall leave this matter until the next stage.

[Amendment No, 165 not moved.]

[Amendments Nos. 166 and 167 not moved.]

Lord Mackay of Ardbrecknish moved Amendment No. 167A:

Page 33, line 5, at end insert:

("Claims yet to be determined and suspended payments

.—(1) In such circumstances as may be prescribed, a claimant may be treated as being entitled to an income-based jobseeker's allowance before his claim for a jobseeker's allowance has been determined.

(2) In such circumstances as may be prescribed, an income-based jobseeker's allowance shall be payable to a claimant even though payment to him of a jobseeker's allowance has been suspended by virtue of regulations under section 5(1) (n) of the Administration Act.

(3) A jobseeker's allowance shall only be payable by virtue of sub-paragraph (1) or (2) if the claimant has complied with such requirements as to the provision of information as may be prescribed for the purposes of this paragraph.

(4) Regulations may make provision for a jobseeker's allowance payable by virtue of sub-paragraph (1) or (2) to be—

  1. (a) payable at a prescribed rate;
  2. (b) payable for a prescribed period;
  3. (c) treated as being a contribution-based jobseeker's allowance for the purposes of section 5 of this Act.

(5) Regulations may make provision—

  1. (a) for the recovery, by prescribed means and in prescribed circumstances, of the whole or part of any amount paid by virtue of sub-paragraph (1) or (2);
  2. (b) for the whole or part of any amount paid by virtue of sub-paragraph (1) to be treated, if an award is made on the claim referred to there, as having been paid on account of the jobseeker's allowance awarded;
    3. 1136
  3. (c) for the whole or part of any amount paid by virtue of sub-paragraph (2) to be treated, if the suspension referred to there is lifted, as having been paid on account of the suspended allowance.").

The noble Lord said: Amendment No. 167A makes good a deficiency in the Bill. The Bill as it currently stands allows hardship payments to be made only once a decision has actually been made on whether the claimant meets the labour market conditions. As we have discussed on a number of occasions, we wish to extend protection to vulnerable groups during the decision-making process by making hardship payments available to them pending a decision on their entitlement, and to all claimants if the decision-making process lasts more than two weeks.

The amendment allows for reduced-rate income-based JSA to be paid to claimants during all or part of the adjudication process. At the beginning of the claim that will be where the adjudication officer is deciding on whether the claimant is available for work or actively seeking work, or on the terms of a jobseeker's agreement.

If the claim is already running, subparagraph (2) allows for payments to be made if a question arises during a claim over the claimant's availability for work, or on whether he is actively seeking work and benefit has been suspended.

The amendment fulfils our commitment to make provision for hardship payments during the decision-making process. I recognise that our intentions for the use of the regulation-making powers do not go so far as some noble Lords would like, but I hope that they will nevertheless support the amendment which will be used to regulate for payments to all claimants in vulnerable groups throughout the period of adjudication, and to other claimants after the initial two weeks. I beg to move.

Baroness Williams of Crosby

I ask only one question. The amendment goes a little way towards meeting some of the points raised. Can he say a few words on subsection (5) (a) which provides, for the recovery, by prescribed means and in prescribed circumstances"? Is it widely envisaged that these sums will be recovered subsequent to the claimant receiving work?

Lord Mackay of Ardbrecknish

I discussed the matter in relation to an earlier amendment. I said that the question of recovery did not have a very good history. It is difficult to administer. At the time I believe that I suggested—I cannot remember the terms—that we should not pay on account and try to claw it back.

It is difficult to administer. It is not easy. We do not like to do that if we can possibly avoid it.

On Question, amendment agreed to.

Lord Carter moved Amendment No. 168:

Page 33, line 19, leave out ("or not responsible").

The noble Lord said: This is a simple probe. It would be helpful if the Minister can assist us. The purpose of the amendment is to seek an answer from the Government. The income support regulations were amended, under the equivalent power in Section 137 of the Social Security Contributions and Benefits Act, so as to treat the parent in receipt of child benefit as being responsible for the child and no one else being so responsible. That means that the other parent who is not "responsible" cannot obtain benefit for the child during any period—I refer to school holidays, the sickness of the responsible parent, or other circumstances which all of us as parents can envisage—that he or she has the child living with him or her because the "responsible" parent is unable to look after the child.

It would be helpful to hear whether our understanding of the situation is correct. I beg to move.

Lord Mackay of Ardbrecknish

I am happy to explain this provision. It is not new. It carries forward provisions currently contained in Section 137(2) (m) of the Social Security Contributions and Benefits Act 1992. As in many areas of this Bill, we intend to make the same use of the power as is currently made in income support.

The regulations will largely cover those cases where a child or young person spends part of the week with each parent. In these cases, income-based JSA in respect of the child will normally be paid in full to the partner receiving child benefit, regardless of the number of days the child or young person spends with each parent. I believe that this is the right approach.

I am sure that most of the Members of the Committee will agree that it is not appropriate for the department to get deeply involved in the private affairs of people to whom it pays benefit. It is the responsibility of the adults concerned to share the benefit between them if they wish to do so.

The alternative would be for us to try to split the benefit to take account of the number of days the child spends with each parent. This was the procedure under supplementary benefit and was, I am advised, an administrative nightmare. In some cases benefit had to be adjusted every week.

I believe that this power provides for a sensible treatment of these difficult cases. It recognises that the parents involved must be responsible for caring for the child or children, and must reach agreement over the financial arrangements for doing so. I hope that with that explanation the noble Lord will withdraw his amendment.

Lord Carter

I shall read what the Minister said. I do not think that it meets the real problems I described. However, I understand the point the Minister made about administrative problems. I wish to read what the Minister said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 169 not moved.]

Schedule 1, as amended, agreed to.

10.45 p.m.

Clauses 19 to 22 agreed to.

Clause 23 [The back to work bonus]:

Lord Swinfen moved Amendment No. 170:

Page 18, line 47, after ("allowance") insert (", incapacity benefit, severe disablement allowance, invalid care allowance").

The noble Lord said: I beg to move Amendment No. 170 and at the same time speak to Amendment No. 173, with which are grouped Amendments Nos. 174 and 175. The first of the amendments seeks to extend the back-to-work bonus to more people than those who are in receipt of the jobseeker's allowance, particularly to disabled people and carers.

Under current rules, people can work part-time and claim benefit and some of their earnings can be ignored. Most people can keep up to £5 per week or £10 per couple before their benefit is reduced. People with a disability premium can keep up to £15 per week. The jobseekers White Paper indicated that the back-to-work bonus is designed to provide incentives for, and ease the transition into, full-time work of people who are or who have been on jobseeker's allowance or income support. Based on every pound of earnings someone has above the £5 limit, a claimant can build up a credit of 50 pence which will be payable in a lump sum up to a maximum of £1,000 when the claimant moves into employment of 16 hours or more each week or when their partner moves into employment of more than 24 hours a week. Someone can qualify for a back-to-work bonus once they have been employed for three months. The amendment suggests extending the provisions to people on incapacity benefit, severe disablement allowance and invalid care allowance.

The purpose of Amendment No. 173 is to extend the employer's national insurance holiday to people who are out of work as a result of incapacity for work or caring responsibilities. The Bill includes provision for a one-year national insurance holiday for employers recruiting someone who has been unemployed for at least two years as part of a package of work incentives. The amendment seeks to extend the provision to carers and disabled people not—I emphasise "not"—signing on as available for work but claiming invalid care allowance or incapacity benefits. Surely, the case for tackling the employment disadvantage faced by disabled people is equally as pressing to the long-term unemployed. I beg to move.

Lord Carter

I wish to speak to Amendments Nos. 174 and 175 in the names of myself and my noble friend Lady Hollis. The amendments deal with the extension of the national insurance holiday for employers to former carers as well as the long-term unemployed. The arguments are much the same as those advanced by the noble Lord, Lord Swinfen. The purpose is to extend to former carers as well as the long-term unemployed the national insurance holiday for employers. That can be done by linking the scheme to periods of receipt of the invalid care allowance (ICA) and not just the jobseeker's allowance.

The carers who are entitled to ICA will not appear as registered unemployed because they are exempted from signing on. As the rules stand, therefore, we feel that many former carers will miss out on the scheme. I understand that the Government have expressed sympathy with the issue. They suggested that the problem is of administration rather than principle and I believe that the Minister for Social Security and Disabled People, Mr. William Hague, has said that he will look into the issue. Without going through all the statistics, it would be helpful if the Minister could tell the Committee how far the consideration has gone.

Lord Mackay of Ardbrecknish

I wish to address Amendment No. 170 first. The main participants in the scheme will be unemployed people on jobseeker's allowance and lone parents on income support. Disabled people on income support will be able to participate and any earnings above the £15 disregard will count towards the scheme. Any disabled person who claims jobseeker's allowance and makes himself available for work can also benefit from the scheme.

However, we do not see a case at this stage for extending the scheme to the other benefits proposed in the amendment. This new initiative is about helping people who are in the labour market and who need help to get into a job. People who are receiving incapacity benefit and SDA are claiming those benefits on the basis that they are incapable of work. If they are able to undertake therapeutic work, their earnings disregard is the not inconsiderable sum of £44 a week.

Turning to Amendments Nos. 173, 174 and 175, the clause already contains a power to extend by regulations the scope of the national insurance holiday to include people receiving the benefits referred to in these amendments.

The national insurance holiday is intended to provide an incentive to all employers to provide job opportunities for the long-term unemployed. It is essentially aimed at making more attractive to employers those people who may have become demotivated by their inability to find work. This means that it is aimed at helping back into work people who have been capable of work but have not been able to find it rather than those who have been incapable of work.

On Amendments Nos. 174 and 175, we considered whether ex-carers who received income support throughout the qualifying period should be able to qualify for the NI holiday. Carers may be distinguished from people receiving an incapacity benefit in that they were capable of work and would have been in a job but for the caring. We acknowledge that, and I am therefore pleased to tell the Committee that we intend that ex-carers who have received income support should fall within the scope of the national insurance holiday.

Lord Swinfen

I thank my noble friend for his reply, which I shall consider when I read it in Hansard later. I may return to this matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No, 171 not moved.]

Lord Swinfen moved Amendment No. 171A:

Page 19, line 15, at end insert: ("( ) the amount of a bonus to take account of the travel to work distances of persons who may be entitled to a bonus;").

The noble Lord said: The purpose of this amendment is to confirm that the regulations made under this clause provide for the amount of the back-to-work bonus to take into account travel-to-work distances and to ask what are the Government's intentions in that regard.

The issue of travel-to-work distance arises most acutely in respect of jobs in rural areas. In the absence of jobs in their immediate vicinity, rural jobseekers have to contend with serious practical difficulties in terms of time and cost in travelling to would-be job opportunities.

I was encouraged by the remarks of my noble friend Lord Inglewood and what my noble friend Lady Trumpington is signalling at the moment on Amendment No. 150.1 beg to move.

Lord Carter

Perhaps it will help the noble Baroness if I tell her that I have a three-page brief here and I want to read every word of it!

The response to Amendment No. 150 appeared to indicate that the travel-to-work problem will be taken into account. This is particularly acute, as we know, in rural areas because of the lack of transport, the distance from jobs and so forth. Therefore I hope that the Minister will be able to give us a satisfactory answer. And I hope that that pleases the noble Baroness.

Lord Mackay of Ardbrecknish

I have a much longer brief than that, because initially we were not very sure what my noble friend meant by his amendment. Happily, I now know and I shall try to answer him.

Of course I understand that unemployed people may hesitate to take up work that involves a significant travelling distance and expense. However, I believe that the bonus scheme will help claimants to take jobs which are some distance from home. It can, for example, be difficult to meet the cost of a new season ticket before receiving the first wage packet. The bonus will provide a lump sum to help the claimant with that initial expense. That scheme, in tandem with the other incentives such as housing benefit and council tax benefit run-on, ought to provide financial security at the beginning of a new job. I do not believe that we should go further than that and relate the level of bonus payments to the distance that the claimant has to travel.

The bonus scheme will provide clear incentives to people to take work while on benefit and will encourage them to move off benefit. It will give them cash at that difficult point of transition. I hope that my noble friend can therefore withdraw his amendment.

Lord Swinfen

I indeed beg leave to withdraw the amendment. I reserve my right to return to the matter at a later stage.

Amendment, by leave, withdrawn.

Clause 23 agreed to.

Clause 24 [Employment of long-term unemployed: deductions by employers]:

[Amendments Nos. 172 to 174 not moved.]

Lord McCarthy moved Amendment No. 174A:

Page 19, line 47, leave out ("two years") and insert ("one year").

The noble Lord said: We come now to the only other good clause in the Bill; namely, on the employment of the long-term unemployed. It is significant that when something is done for them, they are called "the unemployed". They are not "long-term jobseekers". Thank God for that!

The object of our amendment is to make the provision even better than it is. The object of Clause 24 is a worthy one; namely, to reduce national insurance obligations to employers who take on any of the half million unemployed who have been unemployed for more than two years. The amendment aims to go further and reduce it to one year so that one million workers will be covered by the amendment rather than the half-million covered by the Bill. The reason why we are doing this is quite simple. This is the only part of the Bill that does something for the unemployed. It is true that it is not job creation, which the Government used to do in the early 'eighties, but is job redistribution and preference. It favours the long-term unemployed as against the non-long-term unemployed. On the whole, we are dealing with men without qualifications. Their unemployment rate is twice as high. Many of them are over 50 and have no spouse who works. They have been unemployed for a very long time. All we can do for them if we do not pass this amendment is pray. I beg to move.

Lord Mackay of Ardbrecknish

The proposed national insurance holiday for employers—which I am pleased to hear the noble Lord welcomes—is an incentive to them to take on people who have been long-term unemployed. We chose two years as the qualifying period simply to focus help on this particular group, who obviously find themselves in an even more difficult position than, say, the one-year or one-and-a-half-year unemployed. The deadweight costs will be less than extending the scheme to those who have been out of work for one year. A considerable number of people find work between the one and two-year positions. The amendments would increase the scope of the scheme by including people who have been unemployed for between one and two years.

This can be done in two ways. If we stayed within the £45 million earmarked for this, the holiday would last for only eight weeks. I do not think that that would be very effective. If we did it the other way and simply paid for the reduction to one year, it would cost about £200 million. That is more than we judge we can afford to put into this particular scheme. We want to use the £45 million to concentrate on the two-year-long unemployed. In a number of previous debates the Benches opposite and I have agreed that those people are in the most difficult position of all. I therefore believe it is right that we should target this reasonable benefit on that particularly difficult group. While I appreciate that the noble Lord would like to be much more generous, I hope he accepts that perhaps the importance of targeting overrides that.

Lord McCarthy

I do not expect anything else at this time of night, or at any other time. We shall have to have a Labour government and then we will do far more. I seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 174B and 175 not moved.]

Clause 24 agreed to.

Clause 25 agreed to.

Clause 26 [Pilot Schemes]:

[Amendments Nos.l75A to 177B not moved.]

Clause 26 agreed to.

11 p.m.

On Question, Whether Clause 27 shall stand part of the Bill?

Earl Russell

I have made no attempt to claim my ration of time but I have not become a Trappist monk. This is the Motion on which I want to raise a few points.

Clause 27 came in without a consultation process. We do not yet understand it. It replaces what used to be a government statutory duty to provide resettlement units. It replaces it with a discretionary power to fund resettlement places. I know that this is connected with the transfer of units, but there is no necessary reason why the Schedule 5 funding, on which resettlement units presently depend, should stop.

There is certainly a fear of it. An article in Inside Housing of January this year states: No one is suggesting funding will be immediately withdrawn. The agency is officially keen to stress that there will be cash in the future. But some agency sources claim the Government will quickly cut spending on resettlement, and then scrap it altogether. The move threatens more than 200 projects in the long term". That is why I am trying to replace this clause with an amendment that would continue a duty in a form which I hope is reasonably satisfactory to the Government. I shall ask them—because it relates to the whole matter of Clause 27—to think a little more about the effect of the Bill on the homeless.

Take, for example, Clause 6(3), referring to a person's appearance. One cannot expect the homeless to keep to that requirement in the way that others might. I hope that that is understood by the Government. My noble friend Lady Seear once referred to the homeless who have to sleep rough being required to turn up to look for work in clothes in which a noble Lord would not garden. I hope that the homeless are not going to be judged not to be actively seeking work if that happens.

The requirement to find accommodation, which is imposed on the homeless when they are claiming, is extremely discouraging when there is no accommodation to find. In fact, there are too many cases of people faced with that condition who simply give up looking. One example is that of a man who had been 30 years in the Army, and was clearly used to work, who said: They interviewed me and made me sign a 'Back to Work' plan which said 'Find accommodation'. I gave up signing and survived on hand-outs for a while, then I got a portering job. It wasn't easy, getting up at 5.30 every morning and going to the station to clean myself up for work". One in five of those who are actually roofless have no income, which suggests that the benefit system is missing them already. Under this Bill I believe that it will miss them a great deal more. Until it is possible to have deposits on the Social Fund when you open new leases, it will be very hard to get out of that situation.

We have a problem which is already bad and which this Bill exacerbates. There should be some process of consultation before this clause, which was not debated in the other place, passes into law without anybody thinking about it.

Lord Mackay of Ardbrecknish

If we accept the noble Earl's argument it would mean that the provisions in Schedule 5 of the Supplementary Benefit Act 1976 would remain. They require the Secretary of State to provide directly run resettlement units. There are now only two such units remaining—one in Glasgow (outside Glasgow, in fact) and one in Leeds. Neither are housed in suitable buildings. We intend that both those units will be closed by April 1996 and be replaced by more suitable facilities.

Through the good works of the Resettlement Agency, our policy over a number of years has been to disengage from the direct management of resettlement units. We do not believe that we should be in the business of managing such units. That policy has been widely welcomed, not least by the organisations which provide resettlement places. There are now more places available to people who need resettlement and there has been a huge improvement in their quality.

In 1989 we set up the agency with the main aim of disengaging the Government from the running of those resettlement units. Eight units have been replaced by more modern facilities. Eleven former units are now managed by voluntary organisations and the two remaining units, with the enactment of this clause, will also be replaced by better and more modern facilities. The agency currently provides or funds over 4,100 beds, makes grants to almost 100 separate organisations and over 200 projects and we spent around £22 million on grants to voluntary organisations and local authorities in the last financial year.

I think that perhaps the noble Earl has missed the significance of the phrase "without a settled way of life". The help given by the agency and the voluntary bodies that I mentioned goes beyond the confines of homelessness.

The aim of resettlement is not limited to securing temporary or permanent accommodation. We require organisations not only to provide accommodation but to help individuals to cope with permanent accommodation. Various forms of help are offered—training in life skills and helping to secure health care. I can understand why the noble Earl has put down an amendment to probe what we are doing but I can assure him that the situation we envisage in the future under the new system, with the voluntary bodies, local authorities and others providing this kind of work, will be better than what we have had heretofore with the department trying to do it with its own hand. I am sorry for my abbreviated reply. I hope that that assures the noble Earl.

Earl Russell

I am very grateful for that reply. I shall not debate it now but I should be grateful if the Minister could answer two questions. Can he tell me that Schedule 5 funding will continue? Can he tell me that the full rigour of this Bill, and especially the appearance clause, will not be applied to the homeless as it is to the others?

Lord Mackay of Ardbrecknish

I think I can assure the noble Earl on both points. As far as I understand the second one, anything to do with looks or clothes does not come into it when it comes to the organisations to which we shall be paying grant taking in people who need the kind of resettlement help they provide. As to the noble Earl's first question, we shall continue to do the work we have set our hand to do so far as concerns paying grants to these voluntary organisations.

Earl Russell

I thank the Minister warmly.

Clause 27 agreed to.

[Amendment No. 178 not moved.]

Clause 28 agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 178A:

After Clause 28, insert the following new clause:

Insolvency

(".—(1) In section 71 of the Administration Act (overpayments), after subsection (10) insert— (10A) Where—

  1. (a) a jobseeker's allowance is payable to a person from whom any amount is recoverable as mentioned in subsection (8) above; and
  2. (b) that person is subject to a bankruptcy order,
a sum deducted from that benefit under that subsection shall not be treated as income of his for the purposes of the Insolvency Act 1986. (10B) Where—
  1. (a) a jobseeker's allowance is payable to a person from whom any amount is recoverable as mentioned in subsection (8) above; and
  2. (b) the estate of that person is sequestrated,
a sum deducted from that benefit under that subsection shall not be treated as income of his for the purposes of the Bankruptcy (Scotland) Act 1985.

(2) In section 78 of the Administration Act (recovery of social fund awards), after subsection (3) insert— (3A) Where—

  1. (a) a jobseeker's allowance is payable to a person from whom an award is recoverable under subsection (3) above; and
  2. (b) that person is subject to a bankruptcy order,
a sum deducted from that benefit under subsection (2) above shall not be treated as income of his for the purposes of the Insolvency Act 1986. (3B) Where—
  1. (a) a jobseeker's allowance is payable to a person from whom an award is recoverable under subsection (3) above; and
  2. (b) the estate of that person is sequestrated,
a sum deducted from that benefit under subsection (2) above shall not be treated as income of his for the purposes of the Bankruptcy (Scotland) Act 1985.".").

The noble Lord said: This new clause will enable the recovery of overpayments of social security from jobseeker's allowance paid to bankrupt people. The clause provides that any such amounts deducted from jobseeker's allowance payable to a bankrupt person are not treated as income for the purposes of the Insolvency Act 1986 and the Bankruptcy (Scotland) Act 1985. Thus creditors would be prevented from accessing these sums.

The Government consider that it is not right to stop recovering overpayments of benefit and social fund loans from current benefit just because a person has been declared bankrupt. The clause also ensures that there is equity between bankrupt persons and other people who have money deducted from their benefit for the same reasons. Without these procedures persons who are bankrupt will be more favourably treated than others receiving benefit. Nevertheless, there are maximum limits on the rates of deductions which can be made from income-related benefit to prevent hardship arising. I commend the amendment to the Committee.

Lord Carter

Can the Minister confirm that in effect this makes the Government a preferential creditor in the situation?

Lord Mackay of Ardbrecknish

The Government would not be a preferential creditor in regard to any other assets but they can continue to take off the benefits still being paid what that person owes them due to a social fund payment or some other overpayment.

On Question, amendment agreed to.

On Question, Whether Clause 29 shall stand part of the Bill?

Baroness Williams of Crosby

I wish to ask a question on this issue. It is so late that I can do no more than ask a very broad question and give notice that we shall take this matter up at later stages of the Bill. When one reads Clause 29 one is bound to say that, added to what is already a chilling Bill, one now sees provision for inspectors. It is very difficult to see quite what inspectors are meant to do. According to Clause 29, they are supposed, to examine, either alone or (if he thinks fit)"— presumably, the inspector thinks fit and not the person being investigated— any matters arising under this Act on which he may reasonably require information". In certain circumstances, they would have access to private dwelling houses. In all other provisions they will have access to any premises liable to inspection. The issue about dwellinghouses arises if it is thought that there is a trade or business being conducted in them, but they do not have to have any evidence to bear out why they think that. I find the whole of Clause 29 profoundly disturbing. At this stage I can only ask the Minister the purpose of this inspection and what the inspectors are meant to be doing.

Lord Mackay of Ardbrecknish

Powers of inspection have existed in social security law for a long time, with the use of inspectors a key part in protecting the benefits system from abuse. In the main, Clause 29 carries forward provisions which have existed for many years. Will the noble Baroness accept that I shall study what she has said and write to her in as much detail as I can about the issues she has raised and copy the letter to the Leaders of the other parties?

Clause 29 agreed to.

Clause 30 [Offences]:

[Amendment No. 179 not moved.]

Clause 30 agreed to.

Clause 31 [Interpretation]:

[Amendment No. 180 not moved.]

[Amendment No. 181 had been withdrawn from the Marshalled List.]

[Amendment No. 182 not moved.]

Clause 31 agreed to.

Clause 32 [Regulations and orders]:

[Amendment No. 183 not moved.]

Clause 32 agreed to.

Clauses 33 to 35 agreed to.

Clause 36 [Transitional provisions]:

Lord Mackay of Ardbrecknish moved Amendments Nos. 183A to 183F:

Page 30, line 9, leave out ("by virtue of regulations under") and insert ("under regulations made by virtue of').

Page 30, line 11, leave out from ("allowance") to end of line 12 and insert ("(a "transitional allowance")—

  1. (i) of such a kind,
  2. (ii) for such period,
  3. (iii) of such an amount, and
  4. (iv) subject to such conditions,
as may be determined in accordance with the regulations;").

Page 30, line 12, at end insert: ("(bb) for a person's continuing entitlement to a transitional allowance to be determined by reference to such provision as may be made by the regulations;").

Page 30, line 13, leave out from ("a") to end of line 14 and insert ("transitional allowance").

Page 30, line 15, leave out from ("a") to end of line 16 and insert ("transitional allowance").

Page 30, line 29, leave out from ("that") to ("allowance") in line 31, and insert ("the rate of a contribution-based transitional").

The noble Lord said: Amendment No. 183A is a purely technical amendment and its purpose is simply to correct an inaccuracy in the drafting. Before I go to the others, it is our normal practice to make transitional arrangements to protect existing claimants when changes are made to the benefits system. We intend to apply that principle to people in receipt of unemployment benefit and income support at the point of change to the jobseeker's allowance.

Amendments Nos. 183B, 183D and 183E ensure that the term "transitional allowance" is used with reference to payments of jobseeker's allowance made under the transitional arrangements. We consider that this improves the clarity of the drafting by clearly identifying where the payment of jobseeker's allowance is made. Amendment No. 183F similarly provides that, where a person meets the conditions for contribution-based JSA, then any payment under the transitional arrangements shall be "contribution-based transitional allowances". These amendments provide for the regulations to be tailored to meet the transitional arrangements to bring these proposals into effect. I beg to move.

Baroness Hollis of Heigham

On this side of the Committee we had prepared a 20-minute speech on these very technical amendments, but given the extreme lateness of the hour we shall reserve our right to comment on them.

On Question, amendments agreed to.

Clause 36, as amended, agreed to.

Clause 37 [Short title, commencement, extent etc.]

[Amendment No. 184 not moved.]

Clause 37 agreed to.

Schedule 2 agreed to.

Remaining schedule agreed to.

House resumed; Bill reported with amendments.

House adjourned at a quarter past eleven o'clock.